As e-commerce continues to boom, shipping costs can be a significant concern for businesses, especially when legacy carriers implement their annual General Rate Increase (GRI). These increases are typically imposed to offset rising operational costs such as fuel, labor, and infrastructure. For e-commerce shippers, the combination of GRI and additional peak season surcharges can create a substantial financial burden during the busiest sales period of the year.

Here’s how GRI impacts e-commerce shippers and strategies they can employ to mitigate the effects during peak season.

The Impact of GRI on E-commerce Shippers

1. Increased Shipping Costs: The annual GRI affects base shipping rates as well as various surcharges, including those for residential delivery and delivery area surcharges. For e-commerce businesses with high shipping volumes, these incremental increases can add up quickly, significantly eating into profit margins.
2. Additional Peak Season Surcharges: During the holiday season, legacy carriers often implement peak surcharges, compounding the cost for e-commerce shippers already contending with rising GRIs.
3. Longer Delivery Times: Increased shipping volumes during peak season, paired with rate increases, often lead to slower deliveries, potentially affecting customer satisfaction.
4. Accessorial Fees: E-commerce shippers must also consider accessorial charges for oversized packages, remote deliveries, or special handling, which can also significantly increase shipping costs, especially for small businesses.

Strategies to Mitigate the Impact of GRI

1. Diversify Carrier Options: E-commerce shippers should consider partnering with multiple carriers, including regional providers and alternative delivery carriers.
2. Negotiate Shipping Contracts: Smaller businesses may benefit from using third-party logistics (3PL) providers to access discounted rates through consolidated shipping volumes.
3. Optimize Packaging: Reducing package size and weight can help e-commerce businesses avoid dimensional weight pricing increases and lower overall shipping fees.
4. Use Technology for Rate Shopping: Shipping software can compare real-time rates across multiple carriers to ensure that businesses are always getting the best deal based on each package’s destination, size, and weight.
5. Order Consolidation: Encouraging customers to consolidate their orders into fewer shipments can reduce the number of packages being shipped, cutting down on overall shipping costs and helping to manage peak season demand more efficiently.
6. Plan Early for Peak Season: Advanced planning is essential for securing the best rates and ensuring that carriers can handle the higher shipping volumes. E-commerce shippers who plan early are less likely to incur costly rush shipping fees or encounter shipping delays.
   

By taking these steps, e-commerce shippers can better navigate the challenges posed by legacy carriers’ GRI, manage their shipping costs more effectively, and maintain a positive customer experience during peak season. Planning, diversification, and leveraging technology will be key to mitigating the impact of GRI and peak surcharges, helping businesses maintain profitability through the busiest time of the year.

The opinions expressed by the author are solely their opinions do not necessarily reflect the opinions of Delta or any of its affiliates, subsidiaries or any of their respective directors, officers, employees, agents, or representatives. The opinions expressed are based upon information the author considers reliable, but neither Delta nor its affiliates warrant its completeness or accuracy, and it should not be relied upon as such.