As the end of the year approaches, many businesses are starting to think about the potential impact of the 2023 carrier general rate increase (GRI). If you're a business owner or e-commerce seller, it's important to be aware of these potential changes and take steps to prepare for them.
What is a GRI? Simply put, a GRI is a rate increase that carriers implement to cover their own rising costs. These increases can be significant, and they can have a significant impact on businesses that rely on shipping to get their products to customers.
There are a few key things to know about the 2023 GRI:
- The GRI will go into effect on January 1, 2023.
- The GRI will apply to all carriers, including USPS, UPS, and FedEx.
- The GRI is likely to affect all types of shipping, including ground, air, and international.
- The exact amount of the GRI will vary depending on the carrier and the type of shipping service being used. Some carriers have announced specific rate increases, while others have not yet disclosed their exact plans. The average so far is around 6.9%.
Why do carriers implement general rate increases?
Carriers implement general rate increases for a variety of reasons, including rising fuel costs, inflation, and the need to invest in new technology and infrastructure. These increases are usually announced a few months in advance, giving businesses time to plan and prepare for the changes.
How can businesses prepare for a carrier general rate increase?
If you're anticipating a carrier general rate increase in 2023, here are a few steps you can take to prepare:
- Stay informed: Make sure to keep up to date with news and updates from shipping carriers and industry sources. This will help you stay aware of any potential rate changes and give you time to plan accordingly.
- Review your shipping rates and fees: Take a close look at your current shipping rates and fees to see where you can save money and make your shipping operations more efficient. Consider using shipping software or a shipping specialist to help you optimize your rates and fees.
- Negotiate with carriers: If you're shipping large volumes of packages, you may be able to negotiate better rates with carriers. Don't be afraid to ask for discounts or other incentives to help offset any potential rate increases.
- Consider alternative carriers: If you're not happy with the rates offered by your current carriers, consider exploring options with other carriers. Keep in mind that different carriers may have different rates and services, so make sure to do your research and choose the carrier that best meets your needs.
- Communicate with your customers: If you're anticipating a shipping rate increase, make sure to communicate this to your customers. This can help them plan for the increase and make them more likely to continue doing business with you.
- Outsource order fulfillment. Use a 3PL fulfillment center like Tondo Fulfillment to ship your orders. 3PLs often get deeper shipping discounts because of the shipping volume they bring to the carriers.
All in all, by staying informed, reviewing your shipping rates and fees, negotiating with carriers, considering alternative carriers, outsourcing your order fulfillment and communicating with your customers, you can be prepared for any potential carrier general rate increases in 2023.