Monday, 01 December 2008 13:45 Written by Keith Shay 1 Comment

The weakening U.S. economy has caused businesses and private consumers to do a little belt tightening in recent months, and many businesses in the service industry, including shipping, are among those feeling the pinch. The economic downturn is proving to be both positive and negative for the shipping industry. They have benefited greatly from reduced fuel costs, but are facing the challenge of reduced demand because consumers are watching their wallets and spending less on shipping.

This has lead many of the shipping industry’s major companies to make some changes. Europe-based DHL has been one of the hardest hit by recent economic events. They have decided to discontinue U.S. domestic-only air and ground services starting in January, 2009, so they can focus on international shipping. This move will save the company an estimated $4 billion in annual operating costs.

Other big names like FedEx and United Parcel Service (UPS) are making some adjustments of their own, though not quite so major. Both companies have decided to raise their rates in 2009 in an effort to make up for the decreased demand. Standard list rates for UPS and FedEx ground and home delivery are expected to increase by about 5.9%. UPS is also going to be increasing their air service rates by about 4.9%.

What does this mean for Ware-Pak clients?
While prices may increase slightly, Ware-Pak customers won’t be affected nearly as much as average shipping customers.

Ware-Pak has a long-standing, quality reputation with many of the top shipping companies. We negotiate with all carriers and freight companies for discounted rates, based upon the aggregate shipping activity of the entire warehouse. Customers receive 100% of these discounts. In addition, Ware-Pak’s central location allows us to ship anywhere in the U.S. at a lower cost than much of the competition.

The Bottom Line
Most of the rate increases are scheduled to begin in January 2009 so make sure you get all of your holiday orders out on time. Orders may cost a little more to ship next year, but hopefully as the economy continues to change so will the state of the shipping industry. It helps that clients can count on Ware-Pak to help hold the line on shipping costs in these challenging times.