Short term pain, long term gain
There are three key factors in determining the rate at which we can deliver our clients’ mailings: the rates set by the USPS, the rates we negotiate with comminglers, and the freight rates we have with our carriers to deliver the commingled and drop shipped mail as far into the postal stream as possible.
As we all know, postal rates will rise in 2019 as they generally do every year. In addition to increasing rates from the USPS, we anticipate freight rates to increase as well. Why? Well, according to Logistics Management, trucking executives are reporting that demand for freight carriers is exceeding capacity and they have been rejecting freight during the last quarter of 2018.
Why are carriers rejecting freight?
For over a decade profits in the trucking industry have been paper thin while the cost of fuel, insurance, equipment and drivers have all gone up. This has made reinvesting into the business nearly impossible for most carriers. Adding trucks and drivers has just not been an option, so there simply aren’t enough trucks to move all the freight.
What’s next for carrier companies?
The steady demand for transportation is allowing freight companies to increase their rates, buy more trucks, and hire more drivers. They will be better able to meet demand, and rates will again stabilize.
What does this mean for my commingled and drop ship mailings?
While it may sound alarming, we do anticipate higher freight expenses, but our volumes allow us to deliver steady and predictable rates to our customers. Our clients will still see an average of 5 percent to 15 percent savings on their mailings with the use of our postal logistics services.
Now, more than ever, postal logistics makes sense. We’re always available to answer any questions you have – please don’t hesitate to give us a call at 443-539-2640.
