Business View Magazine May 2023

7 BUSINESS VIEW MAGAZINE VOLUME 10, ISSUE 5 Source, Supplychaindrive.com, Max Garland, First published on April 14, 2023 Tusk Logistics co-founder and CEO Ben Emmrich longs for a day when parcel shipping rates adjust dynamically based on supply and demand. “It’s absurd that our industry hasn’t been able to get there yet in a meaningful way,” he said. As Emmrich envisions it, dynamic pricing would benefit both carriers and their customers. If a carrier is under capacity and has extra space in their network, it could lower prices to attract more volume. If capacity is tight, it could increase prices to tamp down demand. Reaching those capabilities is a tall order for the industry. Today, base shipping rates are a static affair until carriers roll out their annual price hikes. However, FedEx and UPS have already been making strides toward dynamic pricing over the past year, and they plan to further implement it in their operations going forward. Delivery giants advance pricing programs Experts say FedEx and UPS already leverage surcharges to hike prices in a dynamic fashion. Added fees, like UPS’ demand surcharge, have become more prevalent in recent years since the pandemic-fueled home delivery boom strained carriers’ networks. While a lot of shipper contracts have limits on how much rates can increase, those caps generally don’t apply to surcharges, said Transportation Insight Chief Strategy Officer John Haber. “COVID hit, and all of a sudden we saw an influx of new charges,” Haber said. “You have DYNAMIC PRICING IS SLOWLY MAKING ITS WAY INTO PARCEL DELIVERY O p e n i n g L i n e s OPENING L INES