Weak pricing for the rest of the 2023 parcel-delivery season will give way to 6%-%10% increases in base rates and accessorials charges in 2024, according to parcel consultants.
Branden Burt, director of parcel operations for TransImpact LLC, said that weak freight markets will keep rates low through the balance of the year. However, that will not stop carriers from taking up rates in 2024 due largely to the impact of inflation, and the dominance the carriers enjoy on business-to-business (B2B) and to a lesser extent, business-to-consumer (B2C) deliveries.
Shippers, which will soon gear toward building their 2024 budgets, should expect another inflation-driven increase in tariff rates of about 5.9%-6.9%, which Burt said "mirrors the sentiments" of late 2022.
FedEx Corp. and UPS Inc. (NYSE: UPS) imposed record-setting 6.9% general rate increases for 2023. FedEx (NYSE: FDX) executives, in particular, have been public in saying that most of those increases have held.