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Supply Chain by the Numbers

- Oct. 27, 2022


Supply Chain by the Numbers for October 27, 2022


UPS Follows FedEx in Record Rate Increase; Microsoft Says Corporate Emissions Goals will not be Met; US Bank Shipment Index Falls; How much do Amazon Delivery Drivers Make?




That is the average rate the price to ship a parcel will  rise as part of UPS’ general rate increase for 2023, as announced this week. With the news, UPS matched rival FedEx’s 6.9% GRI announced in September, a record annual hike for both parcel giants. FedEx and UPS raised shipping rates by an average of 5.9% for 2022, the first time in eight years that either had increased prices more than 4.9%. The new UPS rate schedule, which goes into effect Dec. 27, will see an average increase of 6.9% across Ground, Air and International services, the company said. Also on that date, UPS Air Freight within, between and among the US, Canada and Puerto Rico will increase an average of 6.2%. UPS also announced other changes for 2023, including canceling the variance of scheduled pickup options based on weekly billing total; increasing the late payment fee from 6% to 8%; “dubbing peak/demand” surcharges as just “demand” surcharges; and changes to the zone assignment of some ZIP codes. This even as parcel volumes seem to be declining.





In what may be the most interesting supply chain number of the week, that is the number of companies across the globe that have made climate pledges of one type or another, according to an estimate this week from Microsoft. Why is that news? Because most of them will not be able to deliver on reaching their goals, according to company president Brad Smith. The executive made his comments during a presentation at the inaugural Breakthrough Energy Summit in Seattle. “There does not yet exist the capacity for most - for almost any company - to, with confidence - turn that pledge into the progress that has been promised,” Smith told attendees. He added that “You’ve got to be able to count, you’ve got to be able to measure, and you’ve got to put the systems and people in place to drive the change that you’ve promised to make.” Two key problems, Smith said, are the inconsistency in nomenclature and a lack of general knowledge about the fundamentals of climate emissions tracking, noting how difficult it is to track so-called Level 3 (supply chain) emissions.




That was the decline in the US Bank Shipments Index in Q3 versus 2021, as we continue to see mixed freight data. The Index, which encompasses both full truckload and less-than-truckload freight movements in the US, was also down 2.6% versus Q2. However, the quarter-over-quarter changes varied by region, with the Southwest region seeing strong growth from the second quarter. Freight expenditures were down a little less, falling 2.4% versus the previous quarter. US Bank says there were a number of contributing factors behind the decrease in spending during the third quarter. In addition to reduced freight volumes, contract rates also likely flattened from the second quarter. Another contributing factor was the decrease in diesel prices from the second quarter, which, while still high, saw the price of diesel nationwide declined 4.6% from the second quarter, resulting in lower fuel surcharges. On rates, the report notes that unlike the spot market, contract freight, which makes up the majority of the US Bank index, did not experience large drops.






That is the annual average pay for an Amazon delivery driver working for one of Amazon's Delivery Service Partners makes per year . That according to research from ZipRecruiter, based on a scan of active job databases, the company announced this week. The pay varies a bit from market to marlet, with some cities, such as Atkinson, Nebraska, having drivers who make as much as $55,359 annually, while drivers report making $49,401 in Manhattan. Amazon has another program called Flex, in which delvery drivers use their own vehicles to to the job. Most Amazon Flex drivers earn between $18 and $25 an hour, the company reports, depending on which state a driver lives in and how long it takes them to complete their deliveries. By comparison, Amazon fulfillment center workers make an average annual pay of $34,268.

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