Parcel November/December 2025

PROTECT YOUR PARCEL PAGE 21 / STREAMLINE YOUR RETURNS PAGE 29

NOVEMBER-DECEMBER 2025 PARCELindustry.com

WHY YOU SHOULD NEGOTIATE PARCEL SURCHARGE RATE CAPS. PAGE 10

IS YOUR ORDER FULFILLMENT PROCESS AS OPTIMIZED AS IT COULD BE? PAGE 20

THE RISE OF ALTERNATIVE CARRIERS. PAGE 26

DYNAMIC CONTRACTS AND PREDICTIVE LOGISTICS: The New Frontier for Parcel Shippers.

PAGE 18

O T E E R E IB H R K C C I CL SUBS

CONTENTS ///

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Volume 32 | Issue 7

20 24

18 06 EDITOR’S NOTE Saying Farewell to 2025

By Amanda Armendariz

08 INDUSTRY INSIGHT Small Parcel Shipping in the New Age: Leveraging Intelligence for Resilience

By Brian Estes

18 DYNAMIC CONTRACTS AND PREDICTIVE LOGISTICS: THE NEW FRONTIER FOR PARCEL SHIPPERS

28 THE 2025 CARRIER SATISFACTION SURVEY: OUR READERS RATE THE CARRIERS

20 IS YOUR FULFILLMENT PROCESS AS OPTIMIZED AS IT COULD BE?

SPONSORED CONTENT

By Matt Huckeba

22 START 2026 OFF ON THE RIGHT FOOT WITH THESE 10 NEW YEAR’S RESOLUTIONS

By Josh Dunham

12 PARCEL COUNSEL Shipment & Destination Contracts: What Parcel Shippers and Receivers Need to Know

By Andrew M. Danas

24 DELIVERING ON EXPECTATIONS: SMARTER WAYS TO SERVE THE MODERN CUSTOMER

By Mark Kolde

14 REVERSE LOGISTICS The Growth of Hyper-Local Returns

By Tony Sciarrotta

16 INSIDE PARCEL FORUM ’25 CHICAGO: A MARKETPLACE IN TRANSFORMATION

By Amanda Armendariz

By Andy Lockhart

10 SUPPLY CHAIN SUCCESS Negotiating Parcel Surcharge Rate Caps

By Andy Johnson

26

26 THE RISE OF ALTERNATIVE CARRIERS: WHAT SHIPPERS SHOULD KNOW

By Allison Lloyd

4 PARCELindustry.com  NOVEMBER-DECEMBER 2025

By Thomas Andersen

07 CABRELLA TRANSFORMS CLAIMS MANAGEMENT FOR GLOBAL 3PL 13 USPS RATES ARE GOING UP. YOUR COSTS DON’T HAVE TO. 15 RETURNS ARE WRECKING YOUR WORKFLOW 21 PROTECT YOUR PARCEL 3 premier insurance companies that can help.

29 STREAMLINE YOUR RETURNS 3 specialized companies that can help.

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PRESIDENT CHAD GRIEPENTROG PUBLISHER KEN WADDELL EDITOR AMANDA ARMENDARIZ [ amanda.c@rbpub.com ]

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CREATIVE DIRECTOR KELLI COOKE ADVERTISING KEN WADDELL (m) 608.235.2212 [ ken.w@rbpub.com ]

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PARCEL (ISSN 1081-4035) is published 7 times a year by MadMen3. All material in this magazine is copyrighted 2025 © by MadMen3. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to PARCEL, MadMen3 or its staff becomes the property of MadMen3. The articles in this magazine represent the views of the authors and not those of MadMen3 or PARCEL. MadMen3 and/or PARCEL expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine.

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NOVEMBER-DECEMBER 2025  PARCELindustry.com 5

EDITOR’SNOTE

SAYING FAREWELL TO 2025

By Amanda Armendariz

I

t’s hard to believe that I’m writing the final editor’s note of this year. I know I say this in every November/December issue, but it always takes me by surprise how fast the year flies by. And this year has certainly been a big one for the parcel shipping industry. The on-again/off-again tariffs imposed by the Trump administration were certainly one of the issues most top of mind for shippers, as companies grappled with how to absorb these increased costs without losing consumers by raising their prices too much. Surcharges and fees imposed by the Big Two seemed to be constantly changing; a far cry from the past, when the General Rate

6 PARCELindustry.com  NOVEMBER-DECEMBER 2025

Increase could be reliably counted on as the one big rate change of the year. Plus, with mixed forecasts for this year’s peak season (some analysts believe holiday shopping will hit $1 trillion for the first time ever, while other reports believe that consumer spending will slow due to economic worries), shippers are trying to best plan their inventory and peak season strategies. Needless to say, 2025 hasn’t been the easiest year for parcel shippers.

But there are some bright spots, too. Check out our PARCEL Forum wrap up article on page 16. With record-breaking attendance, this show was infused with

an energy for discovering solutions, networking, and professional growth. Seeing the passion people have for our industry was certainly inspiring, and it’s these types of people who are going to come up with the most creative, sustainable solutions for the issues facing our industry. We at PARCEL are certainly proud to be a part of it, and we’ll continue to be here as your industry resource as you take your parcel shipping operation into 2026 and beyond.

Cheers to a new year, and as always, thanks for reading PARCEL.

APPLICATION ARTICLE

Cabrella Transforms Claims Management for Global 3PL When a leading omni-fulfillment provider managing over 30 warehouses and 50+ carriers across six countries faced mounting claims complexity, they turned to Cabrella for a comprehensive solution.

The Challenge Operating at global scale created significant operational friction.

Filing claims on behalf of thousands of merchant brands meant navigating each carrier's unique requirements, documentation standards, and processes — creating a major bottleneck for the 3PL's team.

Beyond operational burden, restrictive carrier liability terms frustrated merchants. Coverage limited to carrier negligence meant higher denial rates for incidents like porch piracy.

Variable claim processes, commodity-specific limitations, and reimbursement based on cost of goods sold rather than sales price led to difficult conversations and strained relationships.

The Cabrella Solution Cabrella delivered an end-to-end platform addressing both carrier liability subrogation and comprehensive insurance coverage through a single system.

The solution included seamless API integration allowing the 3PL to embed rating, binding, and voiding functionality directly into their existing systems. For claims, Cabrella introduced a dual-tier approach: merchants could file claims independently through a co-branded portal with full status tracking and document upload capabilities, or 3PL staff could file on their behalf through a centralized interface.

For shipments under $100, Cabrella standardized the carrier liability process — organizing claims data for subrogation partners while eliminating the need to manage multiple carrier systems. For shipments over $100, Cabrella provided comprehensive all-risk insurance covering sales price (including shipping and taxes), broader perils including theft, and faster adjudication with payouts within 5-7 days of compliance.

Measurable Impact The co-branded self-service portal shifted 70% of claim filing activity from the 3PL to merchants — dramatically reducing operational costs while improving transparency. Standardized processes increased successful subrogation rates by over 50%, turning formerly negative merchant conversations into positive outcomes.

The 3PL gained unified visibility across all warehouses and carriers through customized dashboards, enabling data-driven decisions about risk management, packaging strategies, and carrier performance. Most importantly, they secured competitive differentiation by offering merchants comprehensive, affordable coverage through an intuitive platform — transforming insurance from an operational burden into a strategic advantage.

The Impact Doesn’t Stop There Cabrella’s platform has been built with the flexibility to make the same capabilities fully customizable for label generation tools, fulfillment networks, warehousing systems, and broker platforms. These integrations allow partners across the logistics ecosystem to embed coverage and claims automation directly into their existing workflows.

info@cabrella.com 844.422.2735 www.cabrella.com

INDUSTRYINSIGHT

SMALL PARCEL SHIPPING IN THE NEW AGE: LEVERAGING INTELLIGENCE FOR RESILIENCE

By Brian Estes

I

n 2025, the small parcel shipping market hasn’t just evolved — it has reshaped itself entirely.

Shippers today are operating in a fragmented, fast-moving landscape where pricing complexity, operational volatility, and service variability have become the new operational constants. The goalposts have irrevocably shifted, and what once passed for a sound parcel strategy now risks being outdated, inefficient, or even detrimental without regular, rigorous recalibration.

Navigating this environment demands more than sheer scale or legacy relationships; it requires agility, visibility, and insight. Strategic decision-making must now be rooted in high-quality data and deep subject matter expertise.

Companies that fail to embrace this shift risk being left behind by those who use advanced analytics and proactive scenario planning as core tools, not mere afterthoughts.

We must move beyond intuition and anchor our strategy in intelligence to secure resilience and margin.

The Market: A Landscape Rewritten The defining characteristic of 2025 is perpetual motion.

From rate structures to carrier networks and customer delivery expectations, nearly every aspect of small parcel shipping has been in flux. We have observed a fundamental redefinition of zones and service maps by multiple incumbent carriers, forcing large-scale reevaluation

8 PARCELindustry.com  NOVEMBER-DECEMBER 2025

of network efficiency and fulfillment logic. Simultaneously, cost structures have become aggressively dynamic, with fees and surcharges increasingly tied to specific shipper behavior, including volume predictability, dimensioning accuracy, and packaging compliance.

This has been compounded by the blurring lines between peak and base pricing, with formerly seasonal charges becoming year-round financial considerations for many.

This environment has inevitably driven the increased adoption of regional and niche carriers. While these alternatives introduce welcome flexibility and cost savings, they also bring integration challenges, service variability, and administrative overhead.

Static routing rules, blanket discounts, or single-carrier dependencies have proven increasingly risky in a market where service levels and cost structures can shift with little warning. For logistics leaders, flexibility — both operational and strategic — is now a fundamental requirement.

Structural Laws: The Constants That Guide Strategy Despite the constant upheaval, certain foundational truths about small parcel shipping remain steadfast. These structural laws continue to guide best-in-class logistics organizations and provide the spine for an effective strategy.

First, cost is intrinsically profile-dependent. No two

shippers move parcels the same way, and cost is shaped entirely by granular shipment characteristics: zones, dimensions, service levels, and residential/commercial splits.

Without a clear, detailed picture of this profile, all negotiation, modeling, and optimization efforts are reduced to guesswork. Second, volume still equals leverage.

Carrier incentives continue to hinge on aggregate volume, frequency, and consistency.

While that leverage must now be wielded with far greater sophistication than in the past, scale remains a crucial asset in pricing strategy. Finally, modeling and speed-to-insight are mandatory. Forecasting cost and operational impact has transitioned from a best practice to an absolute operational necessity. Quickly identifying overcharges, cost drivers, or service inefficiencies gives companies the ability to act before the financial impact compounds — because intelligence delayed is profit diminished.

New Mandates: Precision and Resilience Understanding what has shifted is just as important as knowing what hasn’t. The core structural changes of 2025 demand a new way of thinking and operating, particularly around cost and carrier relationships.

Carrier Cost Structures Have Become Behavior-Based Pricing is no longer a fixed

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schedule; it is a live contract. Many carriers now price accessorials, surcharges, and even base discounts based on how well a business aligns with their network needs. If you consistently miss your volume targets, expect discount attrition. If your packaging is oversized or mis-declared, you will pay significantly more. If you fail to forecast accurately, you may face volume caps or degraded service.

This profound shift toward precision-based cost models demands detailed, real-time data and constant vigilance.

Relying on "good enough" estimates or rearview analysis simply will not cut it. The goal is no longer to get the best general discount, but to be the most efficient, predictable shipper for the carrier’s network requirements.

Multi-Carrier Execution Is Core to Resilience The dominance of national carriers has declined, not in market share, but in strategic viability. Single-source carrier relationships that once provided operational simplicity now represent a massive risk of inflexibility in the face of service disruption or regional cost spikes. Geographic variability in cost and performance has made regional and localized strategies far more effective.

To protect margin and service levels, shippers are increasingly required to build diversified, multi-carrier networks.

While this creates an operational burden, the long-term benefits in resilience and competitive pricing outweigh the cost. This compels a critical, data-driven tradeoff: should you concentrate volume to maximize incentives, or spread it out to optimize flexibility and margin? This decision is far too complex to be made by gut feel — it must be modeled, tracked, and continuously refined.

The Pillars of Control: Data and Expertise In this high-variability market, two capabilities separate leading organizations from the rest: the ability to analyze deeply and the ability to act wisely.

Data is the common denominator. Your shipment data — if it is complete, timely, and properly structured — is the most powerful asset in your parcel strategy.

It provides clear visibility into the true cost-to-serve across lanes, services, and carriers, and allows you to proactively measure the impact of carrier zone shifts or accessorial changes. Good data allows for proactive insight, ensuring intelligence delayed does not translate into profit diminished.

However, data alone is insufficient; subject matter expertise brings context and precision. Interpreting complex data correctly requires a deep understanding of carrier contracts,

pricing levers, and network dynamics. Domain experts are essential for spotting unfavorable clauses, uncovering overlooked incentives, and translating complex modeling outputs into executable, integrated strategies. The real advantage comes from combining this domain knowledge with sophisticated, data-backed tooling. It is not people versus technology; it is people plus technology that allows companies to move from reactive crisis management to strategic, best-in-class performance.

Strategic Trajectory Heading into 2026 To prepare for continued volatility and capitalize on opportunity, shippers must align around a few critical priorities. The first step is to unify and cleanse shipment data by breaking down internal silos and centralizing reporting. Next, embrace flexibility in carrier strategy, avoiding overcommitting until the long-term implications have been thoroughly modeled.

Furthermore, strategically reevaluate customer delivery assumptions. Many customers are increasingly willing to accept slightly longer delivery times in exchange for reliability and transparency, which opens the door to more efficient zone skipping, pooled distribution, or deferred service models.

Finally, make analytics a routine discipline. Monthly scenario modeling, KPI

monitoring, and detailed cost variance reporting must be embedded into the fabric of operations, requiring deep cross-functional alignment between logistics, finance, and IT to ensure a common view of parcel spend, KPIs, and tradeoff logic.

The small parcel market is no longer a world of fixed rules and steady benchmarks.

It is a dynamic ecosystem — responsive to behavior, shaped by geography, and evolving through relentless innovation.

The most successful organizations are no longer those with the biggest budgets or the longest-standing relationships.

They’re the ones that see clearly, understand deeply, and act decisively. As we look ahead to 2026, intelligence is the new competitive advantage in parcel logistics. The question is not whether change will continue, but whether your organization is structured to keep up with, or ideally, outpace it.

Brian Estes is a Project Manager at Intelligent Audit with nearly two decades of experience in the transportation and supply chain fields, focusing on analytics and digital transformation project management. He has a proven track record of designing and building supply chain analytics and software platforms and managing large-scale implementation projects for some of the world's largest organizations, including over 20 Fortune 100 companies.

NOVEMBER-DECEMBER 2025  PARCELindustry.com 9

SUPPLYCHAINSUCCESS

NEGOTIATING PARCEL SURCHARGE RATE CAPS

By Andy Johnson

I

n today’s fast-moving e-commerce era, it would be extremely difficult to find a company that doesn’t use one of the major parcel carriers like UPS and FedEx. And as anyone who has ever shipped a package with these two behemoths can tell you, it’s not getting any cheaper. But while base shipping rates grab attention, it’s the surcharges — fuel, residential, oversize, demand, dimensional weight, and many more — that quietly eat into margins. That’s why smart shippers are no longer only negotiating a rate cap on base transportation rates; their new strategy also tackles a cap on accessorial surcharges as well. Here’s how to approach it.

Understand the Surcharge Landscape The original concept of a surcharge was simple — it was a way to keep carriers whole when extra costs began to chip away at a specific load or package. Yet over time, surcharges have morphed from a way to stay profitable into a profit center. The COVID pandemic only accelerated this shift, with both carriers adding new and revised surcharges every year until it now just feels like a money-grab — a way to pad the ever-growing bottom line.

10 PARCELindustry.com  NOVEMBER-DECEMBER 2025

Everyone expects the General Rate Increase each year and it isn’t going away anytime soon. Likewise, the fuel surcharge has been one of, if not the most, volatile surcharges for the past 15+ years. Other heavy hitters typically include Additional Handling, Large Package, Residential Delivery, and the suite of Delivery Area Surcharges. But maybe not so obvious are the smaller fees such as Address Correction and UPS’s new Payment Processing Fee of two percent. Some of these charges have increased over 40% in the past few years.

But before sitting down at the negotiating table, you must understand what you’re up against. It’s not enough just to understand that some of your packages will incur these costs; you must know the total cost of each of these accessorial charges and, specifically, which ones are having the most impact.

Accessorial fees can add as much as 30% to a package, so knowing your entire shipping profile is key. And while many shippers realize that accessorial discounts are negotiable, they may not realize that an annual cap on increases can also be negotiated.

proverbial carrot and stick.

Often, carriers will only consider capping surcharges if you offer them something in return: volume, consistency, growth, or strategic value. You need to come prepared with:  A 12- to 24-month historical shipping report, broken down by service level, weight, zone, residential vs commercial, dimensional weight incidence, oversize shipments, and any surcharges applied.  Benchmarking data or industry comparators: What are other shippers paying for similar services?  A forecast of your upcoming volume growth (or contraction) and strategy: Are you moving more direct-to-consumer?

Expanding zones? Introducing new SKUs?  Alternate carrier options: You don’t need to threaten, but you should know what regional or secondary carriers would cost you if you shifted some volume away. This increases your bargaining power.

Build Your Data-Driven Leverage In any negotiation, there has to be some type of bargaining chip. Some type of leverage that can be exercised — the

Negotiate the Contract Structure Here are key contract elements to address when building your surcharge cap into your negotiations:

In short, you must show the carrier that capturing your business is worth forgoing some surcharge revenue in exchange for a long-term, stable win.

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 Base rate + surcharge rate separation: Make sure your negotiated contract clearly distinguishes between base freight rates and accessorial/surcharge rates.

Often, shippers focus only on base; carriers then hike surcharges.  Surcharge definitions and calculation methodology: Ensure the definitions of each surcharge — specifically demand surcharges — are clearly spelled out. For example, clarify if a surcharge is tied to a “peaking factor” or weekly volume deviation (as is the case with FedEx’s Demand Surcharge).  Cap trigger events: Define what triggers the cap (e.g., a holiday peak, national volume spike) and what is excluded (carrier-wide extraordinary events, acts of God, major global supply chain shocks).  Audit and reporting rights: Make sure you have access to shipment level reporting and the ability to audit surcharges separately. If you find surcharges that shouldn’t apply or are higher than agreed upon billing, you want recourse.  Contract duration and re-negotiation timing: If you secure a strong cap, you might want a multi-year term.

But also build in annual review points, since shipping dynamics change. It’s not uncommon for shippers to adjust pricing and terms multiple times over a threeyear contract.

That’s why smart shippers are no longer only negotiating a rate cap on base transportation rates; their new strategy also tackles a cap on accessorial surcharges as well.

Prep Your Negotiation Strategy With your data and contract targets in hand, consider the following tactics:  Lead with value: “We appreciate our relationship and here’s our volume, growth trajectory, and willingness to commit to X-year term if you will cap surcharges at Y.”  Prioritize key surcharges: Not all surcharges are equal for you. If you ship many residential parcels, focus

on residential delivery or demand surcharges. If you ship oversized equipment, focus on large/oversize handling.  Benchmark and walk away option: If you have data showing competitors or alternate carriers have lower surcharge caps or simpler accessorial structures, mention it (without issuing a blunt threat).  Packaging and process improvements as bargaining chips: Offer to optimize your packaging, reduce DIM-weight incidence, or reduce oversize shipments in exchange for better cap terms. This shows you’re trying to reduce cost drivers.  Quantify the value of the cap: Understand how much a cap is worth to you (e.g., “Without a cap, last year we paid $X in surcharges.

With a cap at Y, we’ll save $Z.”) Express that in your negotiation.  Negotiate for transparency and escalation clauses: Build in that if the carrier changes its surcharge structure (new surcharge created, or major shift in calculation), you’ll have the right to re-open the cap negotiation.

Monitor Performance and Enforce the Cap After the contract is signed:  Review invoices monthly for surcharge compliance. Look for unexpected spikes or new surcharge categories.

 Use third-party audit to capture invoice anomalies (e.g., residential packages billed as commercial, DIM weight miscalculated, zone misclassifications).  Trigger renegotiation when needed: If shipping volume changes significantly, or you’re consistently hitting the cap and still losing margin, initiate the review clause in your contract.  Track carrier behavior: Carriers may shift costs into newly introduced surcharges or create new accessorial surcharges. Stay vigilant.

Securing a surcharge cap with UPS or FedEx isn’t easy, but it’s absolutely worthwhile. Often, shippers accept surcharges as out of their control, yet while surcharges are among the biggest cost drivers in any parcel contract, they can be successfully negotiated and capped. With thorough data, proper leverage, clear contract language, and ongoing monitoring, you can build predictability into your shipping costs and protect your margins.

Year after year, many shippers are leaving money on the table. If you’re ready to take control of those surcharge line items, the negotiation table awaits.

Andy Johnson is Project Manager, Parcel Consulting, at Infios.

NOVEMBER-DECEMBER 2025  PARCELindustry.com 11

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PARCELCOUNSEL

SHIPMENT & DESTINATION CONTRACTS: WHAT PARCEL SHIPPERS AND RECEIVERS NEED TO KNOW

By Andrew M. Danas

T

hree key legal issues in any parcel shipment are the delivery obligations of the seller; when title passes from the seller to the buyer; and which party bears the risk of loss in transit.

When the contract parties have not specifically defined their obligations in a written contract, for domestic US shipments, all states except for Louisiana have adopted a version of the Uniform Commercial Code (UCC) that determines these obligations based on whether the contract is a “shipment” or “destination” contract.

Every parcel shipper should be familiar with the rules governing shipment and destination contracts, since the legal status of the contract often determines which contract party is responsible for any shipment loss, damage, theft, mis-delivery, or even liability to third parties arising from the shipment of the goods.

Article 2 of the UCC, governing the sale of goods, defines delivery obligations for a destination or shipment contract.

Under a destination contract the seller is required to complete delivery to a particular, identifiable destination, such as the buyer’s place of business. The seller retains title to the goods, and the risk of loss, until delivery.

Most contracts are assumed to be “shipment contracts” under the UCC when the seller is required or authorized to send the goods to the buyer, but there is no specific

12 PARCELindustry.com  NOVEMBER-DECEMBER 2025

agreement by the seller to deliver the goods at a named destination. In such circumstances, the seller’s obligations under UCC 2-504 are only to: (a) put the goods in the possession of such a carrier and make such a contract for their transportation as may be reasonable having regard to the nature of the goods and other circumstances of the case; (b) obtain and promptly deliver or tender in due form any document necessary to enable the buyer to obtain possession of the goods or otherwise required by the agreement or by usage of trade; and (c) promptly notify the buyer of the shipment.

Under shipment contracts, the obligation of the seller to the buyer is complete when the seller tenders the goods to the carrier and complies with the other requirements of Section 2-504. Absent a breach of contract, title transfers to the buyer at the time and place of shipment, as does the risk of loss.

The failure to use specific and clear language in purchase or shipping orders can have significant legal consequences for sellers and buyers. Some courts have stated that if the express terms of a contract do not use the term “delivery” a contract is a shipment contract.

Litigation can arise when other or ambiguous terms are used, such as “ship to” destination.

For example, in a case involving personal injuries

caused by shipped explosives that ignited due to a truck rolling off a road, the seller sought to deny liability, claiming that its sale to the buyer was a shipment contract, while the seller claimed it was a destination contract. The court found that the purchase order stating “Ship via Vendor Truck” was ambiguous and required further fact-finding.

Such disputes can be avoided by entering into clear and specific contracts governing delivery obligations and the passing of title and risk. At a minimum, parcel shippers need to pay careful attention to the UCC requirements for shipment and destination contracts and the preparation and wording of related documents.

All for now!

Andrew M. Danas is a Partner, Grove, Jaskiewicz and Cobert, LLP, Washington, D.C. Visit www. gjcobert.com or email adanas@ danaslaw.com for more information. The information contained in this article is intended to be general background information.

It does not constitute and should not be relied upon as legal advice.

Readers should contact a qualified attorney should they have a specific legal question.

Previous Parcel Counsel columns, including those of regular Parcel Counsel Author, Brent Wm. Primus, JD, may be found on PARCELindustry.com. Your questions are also welcome at brent@primuslawoffice.com.

APPLICATION ARTICLE

USPS rates are going up. Your costs don’t have to.

Starting July 13, 2025, the USPS® will increase many rates for both mailing and shipping products. These changes are part of an ongoing trend across the industry — UPS, FedEx, and other major carriers have also raised their rates and surcharges throughout the year. This leaves businesses trying to navigate a more complex and costly shipping and mailing environment.

Pitney Bowes can help your business manage costs, simplify processes and give you control over mailing and shipping.

Reduce Certified Mail Costs with Electronic Return Receipt Certified Mail remains a critical service for businesses needing proof of delivery, but it continues to be a tedious manual process that keeps costing more. Pitney Bowes software simplifies the entire Certified Mail® process. Our software enables you to process, send, and track Certified Mail online, eliminating manual forms and lost green card receipts. By switching from the traditional green card return receipt to an electronic return receipt, businesses can save up to $1.58 per mail piece. Managing signatures and delivery confirmations is easier, faster, and more cost-effective.

USPS Shipping Savings. Automatic.

Pitney Bowes shipping software automatically applies discounts on USPS services like Priority Mail®, Ground Advantage™, and Priority Mail Express®. This means your business gets access to discounted rates with or without an NSA. Our multicarrier platform gives you the flexibility to compare rates and delivery times, so you can easily choose the best rate for you. You can then track every parcel from drop-off to final delivery — all in one place. The savings and convenience make it easier to ship smarter with the USPS. Discounted Shipping with UPS and FedEx — No New Accounts Needed In today’s landscape, relying on a single carrier is no longer sustainable. That’s why Pitney Bowes multicarrier software provides access to discounted UPS® and FedEx® rates.

Businesses can switch shipping volume to these major carriers

without the hassle of setting up new account numbers. Our shipping software allows you to print labels, compare rates across carriers, and track packages with ease — giving you the power to choose the best carrier for every shipment.

Simplify and Save — All from One Platform As shipping and mailing costs continue to rise across the board, businesses must become more strategic in their approach.

Pitney Bowes is here to help. With solutions that deliver savings on Certified Mail, USPS, UPS, and FedEx, plus powerful tools to simplify the complexities of multicarrier management, we make it easier to take control of your shipping and mailing like never before.

Scan here to get in touch or visit us at pitneybowes.com/ software to learn more.

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REVERSELOGISTICS

THE GROWTH OF HYPER-LOCAL RETURNS

By Tony Sciarrotta

R

everse logistics networks are evolving as returns continue to tick up. According to the National Retail Federation (NRF), retailers estimate that 16.9% of their annual sales in 2024 were returned, up from 16.5% in 2022 and well above 8.1% in 2019. Indeed, returns continue to pose a significant cost for the industry.

The NRF estimates total returns for the retail industry were $890 billion in 2024.

Traditionally, reverse logistics networks are centralized and reliant on regional distribution centers. Products often travel many miles from consumers back to processing hubs, tying up inventory, increasing costs, and adding to emissions.

However, like consumers’ desire for faster deliveries, consumers also want quicker returns processing. As such, we are seeing the rise of hyper-local returns, a model that brings return processing closer to the consumer through drop-off points, micro-fulfillment centers, and retail partnerships. Not only are returns processed quickly in hyper-local networks, but they also lower transportation costs and improve the customer experience.

Retailers such as Amazon, Walmart, Target, and Best Buy have integrated localized return networks into their broader fulfillment strategies, often leveraging existing retail footprints or third-party partnerships, such as Happy Returns and UPS Access Points.

Other third-party logistics providers that offer hyper-local returns include Optoro, acquired by Blue Yonder this year, which supports retailers with software that routes returned items to the nearest optimal location — whether for resale, refurbishment, or restocking —reducing

14 PARCELindustry.com  NOVEMBER-DECEMBER 2025

transport time and costs.

ReBound Returns focuses on localized return flows between retail stores and warehouses while Fillogic leverages its network of micrologistics hubs located near consumers, enabling returned items to be processed quickly and minimizing long-haul shipments.

By handling returns closer to the point of sale or use, companies can significantly reduce reverse transportation costs. Each mile a product doesn’t travel reduces fuel expenses, lowers emissions, and shortens the time to re-enter inventory. For fast-moving or seasonal items, this speed can be critical. A product reshelved or resold within days, rather than weeks, retains far more of its value.

Retailers using hyper-local returns are finding that faster processing not only reduces losses but also enables more efficient inventory reallocation, such as restocking items in local stores where demand is highest.

Many companies are also integrating circular-economy practices into hyper-local models, refurbishing or recycling returned items on-site or within the same region, thereby extending product life cycles and minimizing waste.

But one of the biggest drivers of hyper-local returns is customer convenience. In a market where delivery speed and ease of returns directly influence loyalty, simplifying the return process has become important. Consumers increasingly expect the

same-day ease of returning a product as they do when receiving it. A hyper-local network allows them to drop off items within minutes of their home, no repackaging, no labels, and no waiting for a pickup. For retailers, this convenience translates directly into improved customer satisfaction and repeat purchases.

In fact, surveys show that more than 90% of consumers consider an easy returns process a key factor in choosing where to shop online.

Technology is key to making hyper-local returns scalable and efficient. Data analytics, artificial intelligence, and digital tracking tools are enabling retailers and logistics partners to make smarter decisions about where returned products should go next. Machine learning algorithms, for example, can assess an item's resale potential, identify the closest resale or refurbishment facility, and automate routing decisions in real time.

To be successful, hyper-local returns must balance convenience, cost, and control. They will depend on improving technology integration, standardizing service quality, and leveraging datadriven automation to make decentralized reverse logistics as efficient and transparent as centralized systems.

Tony Sciarrotta is Senior Director for Reverse Logistics & Circularity at the National Retail Federation.

APPLICATION ARTICLE

Returns Are Wrecking Your Workflow Returns don’t show up neatly. They come in waves — unplanned, unorganized, and often unscannable. While outbound operations have made huge strides in automation and efficiency, reverse logistics still tend to be a patchwork of stopgaps, temp labor, and reactive processes.

At least 30% of online orders are returned. These aren’t clean, labeled, uniform packages. They come in polybags, reused boxes, and mismatched SKUs — often damaged, unscannable, or mislabeled. Processing them takes more steps, more hands, and more time than outbound shipping. During seasonal peaks or flash sale fallout, returns can triple with little warning.

Facilities often deal with the surge by bringing in temp labor, extending hours, or setting up trailers in the lot. These shortterm solutions are expensive and unsustainable — especially as labor markets tighten and space remains at a premium.

One of the biggest issues? Manual relabeling. Returns arrive with labels that don’t match current routing rules or SKUs. Staff are tasked with scanning, weighing, dimensioning, and reapplying new labels before routing items back into inventory or to liquidation. When volume spikes, this process becomes a bottleneck, and every delayed item is lost revenue.

That’s why scalable, targeted automation is becoming a priority. Systems like the Chameleon® SLAM (Scan, Label, Apply, Manifest) are designed specifically for the unpredictable nature of returns. Unlike traditional conveyor-based sorters, Chameleon is compact, modular, and flexible.

Chameleon parcel processing solution handles a wide range of mixed packages, including polybags and irregular parcels. It automates the labeling and sorting process with minimal labor, helping operations stay on pace during volatile cycles. Just as

important, it scales both ways. Need to process 2,000 items today and 10,000 next week? Adjust the machine without redesigning your layout or pausing operations.

What sets it apart is how it integrates. Many automation systems come bundled with proprietary software, forcing customers to overhaul their WMS or pay for platforms they don’t need. Chameleon is platform-agnostic. It connects via API to the customer’s Business Logic System, which in turn communicates with their WMS, ERP, or other systems. That means no forced ecosystem, no unnecessary licenses, and full control over your integration path.

In a returns environment where conditions change by the week, flexibility evolves from feature to strategy. Chameleon gives operators a way to manage complexity without adding headcount or hardware they’ll only use part of the year.

If reverse logistics is creating friction in your operation, the right automation can help you regain control, cut costs, and move faster — even when the returns don’t stop.

Engineering Innovation Inc. Eii-online.com sales@eii-online.com 765.807.0699

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NOVEMBER-DECEMBER 2025  PARCELindustry.com 17

DYNAMIC CONTRACTS AND PREDICTIVE LOGISTICS: THE NEW FRONTIER FOR PARCEL SHIPPERS

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By Matt Huckeba

or years, parcel shippers have relied on static, multi-year carrier contracts — agreements that promised predictable rates and stability.

However, between fluctuating fuel costs, demand swings, and a growing competitive parcel market, fixed-rate agreements no longer reflect the true dynamics of shipping. Instead, the use of dynamic contracts is on the rise. Dynamic contracts are flexible, data-driven agreements that evolve in real time alongside market conditions using predictive logistics, which leverage analytics and forecasting to stay ahead of disruptions.

The Decline of the Static Parcel Contract Carriers like UPS and FedEx have shifted toward variable-rate models that better capture real-time changes in demand, capacity, and network density. Surcharges are now dynamic, changing based on factors such as weather, fuel costs, regional constraints, and even shipment profiles.

Prior to the shift to dynamic pricing, parcel delivery networks were more predictable and competition was limited.

FedEx and UPS relied on multi-year, static agreements that locked in base rates and discounts regardless of market conditions. Most regional carriers, couriers, and newer final-mile delivery providers simply adopted those contract structures as the norm.

Today, particularly during periods of high demand such as holiday peaks, surcharges automatically adjust to balance network capacity, while prices may ease when demand softens.

In response to this way of pricing, some large enterprise shippers have adopted volume-flexible agreements that link

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discounts to actual shipping behavior and forecast accuracy.

For example, a retailer might receive better pricing if it meets volume commitments or optimizes delivery timing to reduce strain on carrier networks. This optimization in the fulfillment process carries benefits to parcel capacity and pricing but is now being leveraged cross-functionally to create efficiencies in overall business planning.

For those non-enterprise shippers who negotiated rates six months ago, they may already be out of sync with today’s market realities. Rapid changes in order volumes, business growth, product mix, and other factors — when paired with evolving carrier pricing structures — mean that shippers must be prepared to either constantly negotiate new concessions into their agreement, or absorb cost increases. Carriers, for their part, are pricing in this uncertainty upfront, especially for shippers with more complex or unpredictable shipping patterns. The shift signals a broader trend: parcel pricing is no longer a static exercise; it’s a living, adaptive process that reflects real-world volatility.

Dynamic Pricing: From Disruption to Opportunity When dynamic pricing is embraced strategically, it becomes a powerful tool for cost optimization and service improvement. By using real-time data on capacity, demand, and delivery density, shippers can negotiate rates that more accurately reflect their network efficiency, and carriers can reward that efficiency.

For carriers, it can be used to generate revenue and profits during high-demand periods. For example, during the 2022 holiday peak season, FedEx’s dynamically adjusted surcharges helped bring in $150 million in profit from peak season home delivery fees, according to its Chief Customer Officer Brie Carere. FedEx is also using dynamic pricing and contracts to identify instances of customer overbilling.

UPS and FedEx have also introduced zone-specific adjustments that incentivize shipment density and penalize inefficiencies, aligning cost with operational impact. USPS and Amazon are following suit, leveraging better data and technology to close performance and pricing gaps. The more visibility both sides have into the factors influencing cost, the more collaborative and transparent pricing can become.

The Data Advantage: Predictive Logistics in Action The growing use of dynamic contracting is being driven by data transparency. Shippers today have access to insights into performance metrics, cost drivers, and market benchmarks.

Emerging analytics platforms can forecast everything from fuel surcharges to weather-related disruptions, helping logistics teams anticipate changes.

Two such examples are UPS’s Digital Access Program (DAP) and FedEx’s Pricing API. These platforms provide shippers with real-time insights into pricing, delivery performance, and network capacity, allowing contracts and rates to adjust dynamically.

UPS’s DAP integrates with shipping software services such as ShipStation and others, giving access to live rate comparisons, performance analytics, and surcharges that fluctuate based on delivery zone, parcel weight, and network congestion. When regional volumes spike or fuel prices rise, rates automatically

SUBSCRIBE FOR FREE! adjust to reflect current market conditions, thus eliminating the need for static, multi-year pricing agreements.

Similarly, FedEx’s Pricing API uses real-time data to calculate rates that factor in variables such as shipment timing, destination density, and aircraft or vehicle capacity.

Predictive logistics turns intelligence into action. By modeling multiple “what-if” scenarios, shippers can simulate the impact of different carrier decisions, lane strategies, or fulfillment models before making a move. As such, predictive logistics becomes the “competitive edge” that carriers are using for their pricing. If shippers can implement it in how they build their carrier relationships and pricing, they will be ahead. This level of foresight not only supports dynamic pricing negotiations but also strengthens network resilience, enabling faster pivots when disruptions occur.

However, moving from static to dynamic pricing models requires investments in new tools, data, partnerships, transparency, and trust between shippers and last-mile carriers. Dynamic contracts depend on real-time data integration, predictive analytics, and automated pricing algorithms — capabilities that many organizations have yet to fully implement. Without accurate and timely visibility into shipping volumes, capacity, and costs, dynamic adjustments can appear risky or unreliable. There are also concerns about fairness and volatility. Some shippers fear dynamic pricing could expose them to sudden cost increases.

The Road Ahead As parcel networks grow more complex and customer expectations continue to rise, static contracts will fall further behind. Indeed, dynamic contracts are being embraced throughout supply chains. For example, DHL’s digital freight platforms enable shippers to lock in short-term, volume-based rates that automatically adjust based on lane capacity and performance metrics.

In ocean freight, Maersk Spot provides guaranteed space and equipment at instant, variable rates — prices that shift daily based on demand and vessel utilization. On the air freight side, Lufthansa Cargo uses AI to continuously recalibrate spot prices according to real-time capacity and demand forecasts.

Shippers and 3PLs who build flexible, data-enabled contracting strategies that react in days, not quarters, and continuously optimize both operations and pricing will be the real winners.

Dynamic contracts, powered by predictive logistics, provide the framework for that agility. They enable continuous optimization of both cost and service by linking decisions to real-time market signals. Dynamic pricing doesn’t have to be overwhelming or a disruption; instead, it can be a strategic unlock that rewards transparency, technology, and trust.

Matt Huckeba is Chief Strategy Officer, Evans Transportation.

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singular element in these efforts, it is in no way the only factor. To determine if your fulfillment process is as optimized as it can be requires a careful and comprehensive look at the proverbial “people, processes, and technologies” involved.

IS YOUR FULFILLMENT PROCESS AS OPTIMIZED AS IT COULD BE?

By Andy Lockhart

Y

ou’ve done everything right. Amid the virtually limitless choices available online today, the customer chose your e-commerce site to order from. Everything that led to that decision — the convenience and heritage of your brick-and-mortar stores, the expertise and customer service of your sales associates, the authenticity of your brand, the accuracy of your pricing strategies — it all led to this moment, the completion of a transaction.

In this era of unprecedented convenience when purchases come down to a finger tap on the screen of a mobile phone, it can be easy to forget that every order is the culmination of innumerable, hard-fought victories. Gaining each and every customer is a difficult and costly task. In contrast, losing them — at times forever — often occurs in the blink of an eye. The shipment of the wrong item, a late delivery, or a damaged product can negate the cumulative impact of everything that came before it.

This is why in sports parlance the fulfillment process is the at bat in the ninth inning with the bases loaded. It’s the extra point in a tie game with seconds left on the clock, the clench putt on the 18th hole, and the final lap for the checkered flag.

It is also why, regardless of what sector you serve — general merchandise, apparel, groceries, and the list goes on — the push to optimize fulfillment processes must be unrelenting.

And while the ideal state and efforts to constantly improve will be unique to each organization, there are considerations that are directly applicable to any organization that sells online.

Notably, while technology is by default a necessary and

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Five Steps to Optimize the Fulfillment Process: 1. Examine your current fulfillment process: With the exception of new operations that include the most advanced software and automation in greenfield facilities designed to realize their full potential, most brands rely on a fulfillment process that has been customized and updated over time as evolving demands require. Most include legacy IT systems — including those for Enterprise Resource Planning (ERP), order entry, warehouse management, etc. — that are no longer optimal, as well as older warehouse and materials handling equipment, and more than a few manual processes.

For this reason, efforts to optimize fulfillment should begin with a thorough and complete look at how fulfillment presently occurs. What does it look like and what are the steps involved?

What happens from the moment an item arrives until a successful, on-time delivery is made?

A thorough review of the process will reveal where major problems exist. This analysis identifies areas in need of better automation or highlights steps that are inefficient. It also brings attention to teams requiring additional support, those experiencing overwork, or situations where frequent mistakes occur. For example, are you inserting packing lists in parcels — something which requires more machinery and an extra step when a simple label will suffice? Look at each step in the process and ask how it can be done better.

2. Dig into your data: For most businesses, the most dramatic gains to be made in the optimization of fulfillment operations center on technology. But which technologies make the most sense — from Automated Storage and Retrieval Systems, to robotic pickers, advanced sorters and conveyors, and automated mobile robots — depend on a wide range of factors.

Confirming the weight and size of the items you handle and the volumes involved is the first step in creating an order profile that is crucial to determine what the ideal materials handling systems look like. Are there popular SKUs that will always require manual handling? When are your peaks, and what do those volumes look like?

Answering these questions provides a baseline for any optimization effort. This foundation helps guide important decisions, such as whether to consolidate fulfillment into omnichannel facilities. It also helps in designing facilities that can handle peak demand while remaining cost-effective and realistic.

3. Seek an outside perspective: It is important to remember that while it is imperative not to be stuck with existing manual fulfillment processes because that’s how it’s always been done, it is equally important not to simply automate existing ways of doing things. Automation and technology accelerate workflows, and if applied to the wrong process can result in

SUBSCRIBE FOR FREE! doing the wrong thing, just faster.

Seek an outside perspective to audit your fulfillment operation — one that not only understands technology, but what optimal fulfillment processes look like today, not just theoretically, but in practice. These individuals should have extensive expertise and experience in your industry and be able to point to real-world success stories.

4. Include people-focused improvements: Fulfillment leaders are keenly aware of the significant labor challenges facing warehouse and distribution centers, from attracting talent to retaining it. However, the impact of the fulfillment process on employees is often overlooked. An optimized fulfillment process is naturally more ergonomic and creates opportunities for upskilling, like learning to operate and maintain robotics. Even subtle changes — for example systems that enable pickers to slide items rather than lift them — can dramatically impact the health and happiness of those in warehouse roles.

A refined fulfillment process is also less complex and more intuitive for employees. This makes it easier to train and onboard new hires, including the extra help needed for peak periods.

5. Build the fulfillment process around the customer promise, then track outcomes in real-time: Do your customers expect same-day delivery? The customer promise not only determines basics such as when shipments must depart the warehouse, but also whether internal processes — such as how long it takes the order on the website to reach the warehouse, be picked, packaged, and shipped — are adequate.

The fulfillment process should reflect the customer promise, not determine it.

It's also imperative to measure the ultimate effectiveness of the fulfillment process. This includes tracking outcomes influenced by external partners like suppliers and carriers, as well as post-shipment activities. Metrics such as the percentage of orders that arrive on time, addresses where items more frequently arrive damaged, and other metrics must be tracked and mitigated.

By keeping these factors in mind, supply chain, logistics and shipping leaders can approach the optimization of fulfillment processes in a measured, comprehensive and effective manner. Most importantly, they can proceed knowing they have taken into account the most fundamental considerations required to ensure success.

Andy Lockhart, director of strategic engagement for North American warehouse solutions at Vanderlande, provides retail customers — including many of the world’s best-known brands — with the innovative, scalable systems, intelligent software and reliable services needed to optimize distribution and fulfillment operations. Drawing on his extensive experience in materials handling and e-commerce, Lockhart ensures that each retail customer is equipped and positioned for success in a dynamically changing business environment.

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By Josh Dunham

START 2026 ON THE RIGHT FOOT WITH THESE 10 NEW YEAR’S RESOLUTIONS

’Tis the season to set goals for the year to come; here are 10 areas of focus that will help every shipper thrive in 2026.

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t’s that time, the season when we take stock of the year behind us and prepare for the one ahead.

And just like the resolutions that promise a better future in our personal lives, some plans for improvement are broadly applicable.

A few are perennial classics, the shipper’s variants of going to the gym, eating better, and spending more time with loved ones. Others reflect the significant changes we saw across the parcel landscape in 2025, a year we can now reflect on.

No other year in recent memory, save those during the pandemic, presented shippers with more transformative and disruptive changes. Macroeconomic trends, from high interest rates to lagging consumer sentiment and tariffs, added an

element of uncertainty. And in the face of it, carriers instituted significant changes that significantly impacted shipping operations, strategies, and costs.

The most basic of these, and perhaps the most important, was the overall operational approach of carriers, who made it overtly clear what parcels and shipping profiles they want in their networks. Whereas in years past new surcharges, miscellaneous fees, and rules were announced with a formal process, the changes we saw this year came with little and at times virtually no warning.

Dynamic pricing, long an aspiration, became more pertinent than ever — a point hammered home by a surge of new accessorial charges that dwarfed the bottom-line impact of the general rates increases (GRIs) that alone have

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increased parcel shipping costs by 27% since 2021.

It was, for all intents and purposes, a year unlike any other. With that in mind, I offer the following top 10 New Year’s resolutions for shippers in 2026.

1. Embrace a proactive approach: In years past, while it was not ideal, many shippers could refine their operations at the most basic level, negotiate on an annual basis, and get by. Yes, they would miss out on opportunities — often significant ones — to generate savings.

They would also suffer losses when unforeseen surcharges or other variables emerged, but they could in essence still get the job done. In contrast, the dramatic changes we are seeing from carriers today upend that dynamic and

SUBSCRIBE FOR FREE! pose real dangers for those who are unprepared. In the current landscape, being reactive can translate into dramatic, immediate losses, which brings us to resolution number two.

shippers to rectify this reality with accruals management and GL coding that makes the in-the-moment reporting of shipping costs viable. Your CFO and finance team will thank you.

2. Understand how your shipping profile aligns with carriers’ new approach to shipping rates: In 2025, carriers made it clear which parcels they don’t want in their networks by overtly pricing them out of contention for many shippers.

As a result, aligning your parcels with the right carrier — something which requires a proactive approach — has never been more important.

6. Get down to the SKU level: Histori-

3. Stay in front of definitional changes and new surcharges: As noted above, the annual GRIs, while still important, are no longer the key driver of shipping costs or carriers’ efforts to increase revenue-per-package. That honor falls on new charges and fees that stem from definitional changes, with what constitutes an “oversize” package being one, and new or expanded surcharges.

Two examples are FedEx’s expansion of ZIP Codes that now qualify for a delivery area surcharge and UPS's move to increase its fuel surcharge tables.

To keep costs in check, shippers must address accessorials head on.

4. Negotiate year round: With new rules, fees, and surcharges now frequent levers in carriers’ pricing mix, shippers must respond accordingly. That means negotiating when new rules, terms, and conditions occur. In the current landscape, that means being ready to negotiate year-round.

5. Tame accruals and achieve real financial governance: In any business with significant parcel shipping volume, the time that transpires between when shipping costs are rendered, when carriers’ invoices are received and when they are accounted for can have a profound impact on the accuracy of financial reporting. This is particularly true for organizations that sell online, with e-commerce companies and omnichannel retailers being two prime examples. Today’s platforms enable

relationship with the marketing department can be truly symbiotic. Shipping operations in alignment with marketing know when special offers will make certain items fast movers and how to stage warehouses during peak periods.

Likewise, shipping data — including the actual cost at the SKU-level — is invaluable when determining product pricing strategies, where discounted shipping makes sense and if the always fictional “free shipping” can be offered to win online sales.

No other year in recent memory, save those during the pandemic, presented shippers with more transformative and disruptive changes.

9. Wow the CEO: Shippers are uniquely qualified to offer real data that’s crucial in operational decisions, among them where to open new brick-and-mortar stores, which products to sell in specific regions, and whether distribution strategies are effective. Bring such intelligence to the CEO in 2026.

cally, parcel shipping performance was defined by aggregate results. As long as costs were contained at acceptable levels, things were ok. But even in shipping operations, where everything appeared in order on the surface, analysis at the transaction and SKU level often told a different story. Today, when maximum oversize charges and other fees can be extreme, seeing things at the SKU level is no longer nice to have, it’s mandatory. More than a few retailers learned in 2025 that entire product lines were shipped at a loss and that specific products should only be offered for pickup at the store.

7. Embrace a multi-carrier approach or at least get options: If carriers are actively moving to influence the weights and dimensions of packages in their networks, it stands to reason that shippers will increasingly need options.

For that reason, aligning the right carrier with the right parcel is a hallmark of any effective shipping or fulfillment operation. Notably though, to do so effectively requires even more control to ensure that volume tiers and other parameters are taken into account.

8. Align with the marketing team: Shipping intelligence and data is valuable across the business, but the

10. Use AI to gain and enjoy peace of mind: While AI is often hyped, its utility and application in parcel shipping is already very real and proving its worth.

By using it, shippers can analyze vast amounts of shipping data, run models and simulations to see how various developments — the carriers’ GRIs being one — and responses to them impact costs and the customer promise, and flag costly anomalies. Use it and enjoy the comfort that comes with data-driven, factual decision making devoid of guess work.

The year to come will undoubtedly present shippers with more than a few challenges, but with some key resolutions in mind, we can all take the first step towards an exciting, manageable and prosperous year. Here’s to a great 2026!

Josh Dunham is the co-founder and CEO of Reveel. Founded to help shippers level the playing field for carriers, Reveel’s Shipping Intelligence Platform uses Parcel Spend Management 2.0 technology to provide parcel shippers with the actionable insights they need to lower their shipping costs right now, and an Analytics Hub that enables them to drill down into even the most complex shipping data.

NOVEMBER-DECEMBER 2025  PARCELindustry.com 23

DELIVERING ON EXPECTATIONS:

SMARTER WAYS TO SERVE THE MODERN CUSTOMER

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onsumers today expect shipping that’s fast, affordable, and environmentally responsible, often all at once. Meeting those expectations is no small feat.

Delivery has become an extension of brand identity, shaping perceptions of reliability, convenience, and even corporate values. Yet many shippers still struggle to translate what customers say they want into practical, profitable logistics decisions.

The path to success lies in pairing data-driven intelligence with operational discipline. From how many delivery options you display at checkout to the way you structure your fulfillment network, every decision signals to customers how much you value their time and trust.

Offer Smarter Choices, Not More Choices When it comes to delivery options, more is not better. Research in consumer behavior shows that too many choices can lead to confusion and abandoned carts. The key is understanding who your

By Mark Kolde

customers are and what they value most.

A cost-conscious buyer would expect simplicity and transparency, while an eco-minded shopper may prioritize sustainable packaging or carbon-neutral delivery. Others just want their purchase tomorrow, no matter the method.

Understanding these personas allows retailers and shippers to align delivery promises with customer expectations, rather than presenting a long menu of options that may confuse.

A good rule of thumb is to offer three well-defined choices: 1. Standard — affordable or free shipping within a typical window 2. Express — paid, faster delivery 3. Eco — slower, low-impact fulfillment This “rule of three” helps reduce decision friction while covering the most common needs. It also enables ladder value pricing, or intentionally spacing prices and service levels so the preferred option feels like the most reasonable choice. For instance, when a next-day upgrade is priced high, most customers will naturally gravitate toward a profitable mid-tier two-day option.

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Depending on the business’s goals, it might make sense to drive customers to a specific option.

Technology also makes delivery personalization easier through smart defaults.

If a returning customer regularly chooses eco-delivery or ships to a locker location, the checkout page can pre-populate those preferences. Combined with progressive disclosure, or hiding complex or niche options unless a user actively requests them, shippers can keep interfaces clean while still serving edge cases. The result is a checkout experience that feels personal, fast, and intelligent.

Align the Promise with Operational Reality Every delivery promise must be operationally achievable. Too often do shippers announce new options before ensuring their systems and partners can execute.

The most successful teams start by auditing their delivery capabilities and carrier mix. Offering low-fee alternatives, such as USPS Ground Advantage, FedEx Ground Economy, UPS Ground Saver, or parcel-locker pickup, can meet changing customer priorities without compromising

SUBSCRIBE FOR FREE! reliability. Lockers, for instance, appeal to customers who value flexibility and nighttime access while also reducing failed deliveries and re-shipments.

Consumer sentiment has also shifted since the pandemic. While sustainability remains important, surveys show that product cost and shipping cost now outrank environmental factors as top decision drivers. This makes finding operationally sound, low-cost delivery methods even more critical.

Another important evolution is the end of the “set it and forget it” model.

Leading brands are now embracing continuous testing and diversification, using multiple carriers across weight classes, service levels, and regions. This approach improves capacity resilience and helps manage costs, but it demands diligence: shippers must vet carrier stability and performance. The collapse of small providers in recent years underscores the need for reliable, financially sound partners. Diversify, but do it wisely.

Package for Cost, Sustainability, and Experience Packaging decisions have moved from back-office efficiency to customer-facing brand experience. A box that’s too large, too bulky, or over-stuffed doesn’t just waste material; it signals business carelessness and drives up fees.

Start with right-sizing. Carriers like UPS and FedEx have implemented new dimensional weight and cubic-foot rules that round up package sizes, often increasing billable weight. Even a oneinch bulge can trigger higher surcharges.

Review box dimensions regularly and avoid overpacking items that could distort during scanning. If unavoidable, consider exploring variance allowances in your carrier contracts — a two-inch tolerance can prevent costly reclassification.

Using recyclable or compostable materials has become standard practice, but it’s only one part of the equation. True sustainability comes from eliminating waste at the source. Smarter cartonization software, better product handling, and accurate weight data at manifest creation can all help prevent surprise adjustments and back-end fees that impact profits.

Reducing “cube,” the volumetric

footprint of shipments, not only lowers carrier costs but also improves trailer utilization and warehouse throughput.

Smaller, lighter, denser shipments support faster handling and fewer touches, aligning economic efficiency with environmental responsibility.

logistics platforms use instant analytics, predictive routing, and demand forecasting to identify which orders can shift to more economical modes without affecting customer service level agreements. Automation in sorting, picking, and packing further accelerates fulfillment, reduces errors, and enhances transparency, all essential components of customer trust.

Carriers like UPS and Optimization: FedEx have implemented Continuous The New Normal expectations don’t stand still, new dimensional weight Customer and neither should logistics strategies.

The once-annual recalibration of carrier and cubic-foot rules contracts and service levels has given to a cycle of constant measurement that round up package way and iteration. The most resilient comtreat their logistics network like sizes, often increasing panies a living system, testing delivery options, evaluating packaging performance, and billable weight. revisiting carrier allocations routinely.

Optimize the Network to Balance Speed and Cost Speed is key to customer satisfaction, but it doesn’t always require air shipping. Many businesses now find that ground services can match air delivery times across much of the country. Air guarantees delivery by a set time, while Ground guarantees delivery by a set day, often with the same results. By switching from Next Day Air or 2-Day Air to 1- or 2-Day Ground points, companies can meet deadlines and cut shipping costs without compromising service.

This shift depends on how well a shipper’s network is structured. A centralized model, for example, shipping all orders from Southern California, will always face long transit times to the East Coast. A decentralized or regional network shortens those zones, improving both speed and cost. For companies unable to invest in new facilities, zone-skipping or hub-induction models offer similar benefits by consolidating shipments and moving them in bulk to carrier hubs nearer to the destination.

Likewise, adopting a 3PL approach allows access to additional distribution centers without the capital investment required for physical expansion.

Technology is the unifying force behind this optimization. Advanced

Data visibility makes this possible.

Shippers who harness actionable intelligence can simulate changes before they happen: adjusting box sizes, rebalancing zones, or modeling cost impacts from new dimensional rules. Where spreadsheets once sufficed, today’s industry demands integrated analytics platforms that consolidate cost, performance, and environmental data in real time.

Conclusion The modern shipping landscape rewards clarity, not complexity. Customers don’t want endless delivery choices; they want the right ones, clearly explained and reliably fulfilled. Behind those promises must stand a network built on data, discipline, and smart technology. By simplifying choice, aligning operations, reducing waste, and optimizing networks, shippers can deliver measurable gains in cost, speed, and customer satisfaction.

Mark Kolde is the Vice President of Logistics Intelligence at Sifted, a leading logistics intelligence software company. With more than 28 years of experience in transportation and supply chain management, Mark helps shippers navigate increasing costs and volatile market conditions through data-driven strategies and insights. Connect with Mark on LinkedIn.

NOVEMBER-DECEMBER 2025  PARCELindustry.com 25

are finally right for the long-standing single-carrier model to give way to a truly diversified, multi-carrier ecosystem.

THE RISE OF ALTERNATIVE CARRIERS: WHAT SHIPPERS SHOULD KNOW

F

By Thomas Andersen

or decades, two major players have defined the parcel landscape, but that balance is changing.

As UPS and FedEx prioritize margin optimization over market share, a new wave of alternative options, including regional, tech-driven, and hybrid networks, is gaining traction. The result: greater complexity for shippers, but also more opportunity.

A More Crowded Playing Field UPS and FedEx built networks that set the industry standard for reliability. Their infrastructures remain unmatched, but their strategies have evolved. Both carriers are now laser-focused on profitability, frequently adjusting surcharges, rates, and fees. The once-predictable rhythm of annual rate updates has given way to a volatile pattern of mid-cycle changes, now occurring with increasing frequency and little notice.

This constant recalibration has introduced volatility, pushing many shippers to seek predictability elsewhere. In response, regional carriers and tech-driven solution providers are stepping in, promising lower rates, simpler fee structures, and faster local or regional coverage. For many shippers, the conditions

26 PARCELindustry.com  NOVEMBER-DECEMBER 2025

The Expanding Alternative Network The most visible recent example is OnTrac, which has evolved from a regional operation into a near-national network. Its upcoming Express and Ground Essentials services, launching in 2026, promise coast-to-coast delivery coverage and as much as 30% lower costs than legacy economy services. By eliminating several common surcharges, OnTrac is positioning itself as a compelling, lower-cost option for small and midsize businesses seeking predictability and control.

Amazon Logistics continues to expand its influence as well. The company’s Multi-Channel Fulfillment program now supports merchants selling on Walmart, Shopify, and Shein, signaling a shift from an internal logistics arm to a full-fledged parcel carrier. With unmatched fulfillment density and delivery reach, Amazon has become one of the largest parcel networks in the United States.

Smaller entrants are also scaling quickly. Veho, an e-commerce delivery platform, recently expanded capacity across 15 markets ahead of peak season to meet “retailer demand for flexible, same-day solutions.” Similarly, UniUni, a Canada-based carrier, has launched US operations to connect cross-border networks with affordable ground delivery.

Together, these developments highlight a clear trend: the long tail of parcel carriers is lengthening, offering shippers more choice, flexibility, and leverage than ever before.

Strategic Implications for Shippers For many organizations, regional and alternative carriers can yield 20% to 30% savings on select lanes or parcel profiles, while improving delivery performance in targeted regions.

However, these advantages come with trade-offs. Reducing volume too sharply with FedEx or UPS can erode tier-based discounts or incentives, diminishing overall savings.

The most effective strategy begins with data-driven market analysis. Understanding how current rates compare to market norms enables shippers to pinpoint which alternatives make financial and operational sense. For example, a company shipping lightweight residential parcels to short-zone destinations may gain efficiency by integrating a regional carrier, while maintaining its national provider for longer routes and international coverage.

Ultimately, the goal is to balance the network for optimal cost, service, and resilience.

How to Evaluate Whether Alternative Carriers Make Sense Exploring alternative parcel carriers can create meaningful advantages, but not every business will benefit equally. The right approach depends on a shipper’s profile, operational readiness, and technology infrastructure.

Companies considering diversification should take a structured, data-informed approach: 1. Audit Your Shipping Profile: Identify which parcels generate the highest cost-to-value ratio. Lightweight, short-

SUBSCRIBE FOR FREE! zone residential deliveries are often suited for local or regional carriers, as well as the United States Postal Service.

2. Compare Total Cost, Not Just Rates: Evaluate the full picture, including base rates, fuel, and other accessorials, and the impact of volume shifts on carrier discount thresholds.

3. Model Scenarios Using Actual Data: Use shipment-level invoice data to model costs under different carrier mixes, identifying where diversification drives real savings.

4. Assess Technology Capabilities: Ensure rate shopping, label generation, and billing systems can integrate multiple carrier APIs and service levels without manual intervention.

5. Run Controlled Pilots: Before committing large volumes, conduct limited trials with alternative carriers to validate service levels, transit times, and invoice accuracy.

6. Revisit Contracts Regularly: Diversification should be part of an ongoing contract management strategy, not an ad hoc reaction to new surcharges. Maintaining multiple carrier relationships can give shippers valuable leverage when renegotiating with their primary providers — often leading to better terms, even without full-scale shifts in volume.

For most companies, technology is the biggest barrier to making multi-carrier shipping work. But success depends on more than just visibility, as it requires the expertise to interpret data, balance trade-offs, and design a strategy that aligns cost, reliability, and customer expectations. A deliberate, data-informed approach enables companies to determine whether the potential savings and service improvements truly outweigh the operational complexity of managing multiple carriers.

Looking Ahead The rise of alternative carriers signals a structural shift in how the parcel market operates. While UPS and FedEx continue to hold dominant market share, they now compete in an ecosystem where smaller, tech-enabled players can capture meaningful volume through flexibility and lower cost.

This evolution represents opportunity for shippers, but only if managed effectively. Alternative carriers can provide leverage in contract negotiations, diversify risk, and improve network resilience. At the same time, making any change demands discipline in partner evaluation, data management, and service performance monitoring.

There’s no one-size-fits-all carrier mix. The optimal strategy depends on each company’s shipping priorities, zone distribution, parcel profile, and customer promise — and, most importantly, having the insight to balance them effectively.

Thomas Andersen is Partner and Chief Supply Chain Officer – Operations & Execution at LJM, leading parcel contract negotiation and advisory services across 150+ carrier agreements annually. He brings over 25 years of experience in logistics and revenue management, including leadership at DHL Express, where he managed a multi-billion-dollar shipping budget and led pricing and contract strategy.

Connect with him on LinkedIn or visit myLJM.com.

NOVEMBER-DECEMBER 2025  PARCELindustry.com 27

THE 2025 CARRIER SATISFACTION SURVEY: OUR READERS RATE THE CARRIERS

By Amanda Armendariz

Carrier Performance On a scale of 1-5, with 5 being the highest rating.

Customer Service FedEx | 3.2 UPS | 3.1 USPS | 2.7

On-time Service Performance FedEx | 3.8

Our 2025 carrier satisfaction survey is here! We take a look at how readers view the carriers with respect to a variety of factors. Check it out and see how your experience compares to that of your peers. We’d like to extend a huge “thank you!” to all who participated in the survey!

UPS | 3.7 USPS | 2.5

Delivery Performance

(driver courtesy, package handling)

FedEx | 3.4 UPS | 4.0 Did you use FedEx in the last 12 months for domestic parcel shipping?

Did you use UPS in the last 12 months for domestic parcel shipping?

USPS | 3.0

Claims Processing FedEx | 2.8

10%

14%

Yes No

Yes No

86%

30%

UPS | 2.9 USPS | 2.1

Refunds for Late Delivery FedEx | 2.4 UPS | 2.7 USPS | 1.9

Did you use USPS in the last 12 months for domestic parcel shipping?

7%

Yes No

Pricing (published rates for service levels, The number of "yes" responses for FedEx and UPS are almost identical to last year, while the number of respondents who used the USPS went up significantly, from 70% to 93%.

93%

28 PARCELindustry.com  NOVEMBER-DECEMBER 2025

willingness/fairness of negotiations)

FedEx | 2.7 UPS | 2.9 USPS | 2.9 A few scores were up (like UPS's delivery performance), but for the most part, scores were down across the board.

SPONSORED CONTENT

Other Insights into Our Industry

Streamline Your Returns 3 specialized companies that can help.

70% YES

30% NO

The number of our respondents who reported reaching out to their carrier reps to discuss concerns about how to handle volume growth, supply chain disruptions, etc. was up compared to last year.

11%

Engineering Innovation Inc. (Eii) offers robust mail sorting solutions that streamline returns, especially during peak periods. The Champ™ system, designed for precision and reliability, handles high volumes of mail with ease, reducing manual labor and processing time. By efficiently sorting mail and mitigating potential jams or misreads, The Champ™ ensures a seamless workflow that supports return operations.

Complementing this, Eii's Apian Sort™ cloud-based software provides real-time data insights and seamless integration with existing systems, further enhancing efficiency in mail processing. Together, these solutions enable businesses to manage returns more effectively, reduce operational costs, and maintain customer satisfaction throughout the year.

17%

www.apiansort.com | 765.807.0699 | sales@eii-online.com

28%

44%

Very well; they addressed all concerns and handled them to the best of their abilities Somewhat well Not at all; we experienced significant disruptions that we feel could have been handled by the carriers to at least some extent Other

With over 25 years of international shipping expertise, ePost Global makes logistics seamless for e-commerce brands. From cross-border deliveries to domestic U.S. and Canada shipping, we combine global reach with local precision, leveraging trusted last-mile carriers for the right balance of speed, cost, and reliability. Our complete reverselogistics solution makes returns simple and customer-friendly, with flexible policies, branded self-service portals, automated notifications, eco-friendly options, and multi-language support. Simplify shipping.

Build loyalty. Scale globally — with ePost Global. epostglobalshipping.com | 866.784.8444 inquiries@epostglobalshipping.com

Out of those who reached out, the number who said the concerns were handled very well declined compared to last year, while the number who said issues were handled somewhat well went up. Unfortunately, the number who said their concerns weren't addressed also increased.

38% YES

62% NO

The number of respondents who believe there is enough competition in the parcel industry to keep prices low decreased significantly when compared to last year's 61%.

S&H Systems delivers the expertise, technology, and execution parcel operations needed to stay ahead, especially as returns continue to reshape the supply chain. Our team designs and integrates efficient, scalable returns solutions that reduce touchpoints, improve accuracy, and accelerate processing speed. From automated sortation to intelligent software and data-driven decision tools, S&H helps companies turn returns from a cost center into a controlled, optimized workflow. With decades of experience and a commitment to smart, flexible system design, S&H Systems partners with parcel operations to handle today’s return volumes while laying the foundation for future growth. www.shsystems.com | 870.933.7346 | info@shsystems.com NOVEMBER-DECEMBER 2025  PARCELindustry.com 29

Packages Shipped Per Year

37%

37%

YES

25%

NO

4%

UNSURE

Respondents are fairly evenly split about whether USPS DDU (destination delivery unit) discounts ending will impact parcel spend.

12% 12%

48%

24%

42%

21%

YES

37%

NO

<100,000

UNSURE

100,000-499,999 500,000-1 million 1-4 million

A good percentage plan to add Amazon into their carrier mixes now that the company is emerging as a national parcel carrier.

>4 million

0%

Once again, accessorial charges are the biggest complaint shippers have with their primary carrier.

The number who listed pricing as their number-one concern increased significantly from last year.

6% 29%

Accessorial Charges | 36%

47%

Claims Processing | 0% Customer Service Response | 8% Driver Behavior | 4%

12%

6%

Fuel Surcharges | 4% Fuel Surcharge Reversals | 0% Invoices | 4%

Needed to achieve better pricing

Negotiating Contracts | 4%

Dissatisfied with service

On-time Performance | 4%

Changed our level of service (i.e., air to ground) Diversified to use more carriers

Pricing | 20% Refunds for Non-performance | 0%

Reduced the number of carriers used

Relationships with Carrier Reps | 0%

Re-bid transportation and a different carrier won

Residential Deliveries | 4% Service Failures | 12% Tracking | 0%

0

10

20

30

40

50

60

70

30 PARCELindustry.com  NOVEMBER-DECEMBER 2025

80

90 100

Like in 2024, needing to achieve better pricing was the overwhelmingly popular answer when asked why our readers modified their primary carriers. However, this year, no one reported re-bidding transportation and having a different carrier win, which was 4% last year.

WHO HAS THE HOT SUPPLY CHAIN SOLUTIONS?

NOVEMBER-DECEMBER 2025  PARCELindustry.com 31