Data science can help shippers become eligible for the lowest rates from FedEx and others, says Caleb Nelson, chief growth officer at Sifted.

FedEx has announced the largest rate hike ever — an average of 6.9% — and while the number is hard to take for many companies, Nelson says the word “average” is key to understand. “It’s going to impact shippers differently, depending upon where they're selling, how they're selling, what they're shipping, et cetera. While 6.9% is the average, it might not be your average.”

In fact, double-digit increases are not out of the question, Nelson says. For instance, for e-commerce businesses sending oversized packages to homes, double-digit increases are quite likely. “So for shippers, it's a moment of realization that they can no longer keep doing business as they've normally been doing it,” he says. “They need to make some adjustments. If you're selling products that do not fit nicely into a 10-inch by 10-inch by 10-inch box, you're going to be paying a lot more than 6.9%, that's for sure.”

Nelson says the industry is seeing order volume declining already, and that will continue, though he doesn’t believe the general rate increase is a “huge component” in that. Nevertheless, free shipping is destined for extinction, he says. “I think free shipping on all products, no matter the size, will eventually be a thing of the past.”

How can one prepare for these GRIs? “Look at what you can control,” Nelson says. “Can I control my contract? Can I control some of the self-inflicted fees I might be putting on myself based on how I'm shipping? It’s all found in the data, and shippers need to understand their data so they can make corrective action to some of these changes outside of their control.”