Resource Center/Article • 01/20/2022

2022: Supply Chain Issues May Ease but Parcel & LTL Costs Set to Rise

This year’s Parcel and LTL marketplaces welcome rising costs to not just meet demand but lead the future markets.

PARCEL CARRIER NEWS

FedEx
  • ???? The carrier’s Residential Delivery Surcharge sees a per-package increase this month. Beginning January 17, 2022, the Residential Delivery Surcharge will increase by $0.60 per package for FedEx Express and FedEx Ground U.S. domestic residential packages (excluding FedEx Ground Economy and FedEx One Rate packages).
  • UPS
  • ???? The carrier announced plans to increase shipment visibility, codenamed Project Evolve. Few specifics were shared by UPS CEO, Carol Tomé; however, the carrier did say to expect a product that “will provide a digital dashboard to capture every move along the package supply chain.” The carrier has not charged a specific timeline or current progress.
  • ✈️ The carrier has also announced plans to purchase 19 Boeing 767 Freighters as it works to meet expanding e-commerce demand. The move would allow UPS to “meet near-term and long-term cargo demand”.
  • In December, the carrier celebrated over one billion COVID-19 vaccines “delivered with near-perfect on-time delivery.” UPS noted that the “milestone was made possible through UPS’s innovative approaches, one-of-a-kind UPS® Premier tracking technologies, industry-leading cold chain solutions, and an expansive, sophisticated, global network providing UPS Healthcare™ services to customers and communities around the world.”

  • GRI & SURCHARGES

  • LTL Carrier NEWS

  • After 96 years of operation, Central Freight Lines closes its doors. “The company explored all available options to keep operations going. However, operating losses sapped all remaining sources of liquidity, and the company’s liabilities far exceed its assets, all of which are subject to liens in favor of multiple creditors,” said the carrier’s president, Bruce Kalem, “The company concluded that the best alternative was a safe and orderly wind-down.” The carrier’s prior freight will likely be divided across a variety of LTL carriers; however, the company stands as a cautionary tale for other industry leaders about being omni-strategic regarding financial commitments incurred.
  • ???? Similarly, Logistics Management reports LTL carriers anticipate continued rising costs for shippers as carriers focus on improving their networks and adding capacity. But LTL carriers aren’t simply seeking just any improvements – they are seeking “what best fits into our business model[s]”.
  • ???? The Journal of Commerce (JOC) has also reported anticipation of rising LTL shipping rates in 2022, pointing to LTL carriers like Old Dominion Freight Line (which recently announced a 4.9% GRI increase), Yellow, XPO Logistics, Force Freight, and Estes Express Lines as examples of what to expect this year. It’s estimated that LTL carriers will increase their overall revenue by nearly 12% this year, not including the estimated almost 27% revenue increases in 2021.
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