What is FedEx Collect in 2024? The Essential Guide
Ecommerce continues its exponential growth, with retail sales set to reach $1.14 trillion in 2024 in the US. This rise in purchases means more inbound inventory shipments than ever. FedEx Collect allows businesses to manage these shipments while optimizing costs. But what exactly is it, and is it still relevant?
How Does FedEx Collect Work?
FedEx Collect is a billing feature that lets authorized commercial recipients pay FedEx directly for all shipping charges on inbound packages from vendors and suppliers.
It works by having vendors attach a FedEx Ground Collect barcode label on parcels that displays "Collect." Recipients later receive a FedEx invoice for these shipments based on the greater volume discounts their account qualifies for.
| Shipping Option | Who Pays | When Paid |
|---|---|---|
| FedEx Collect | Recipient | 100% pre-paid to FedEx |
| Prepaid | Shipper | 100% pre-paid by shipper |
| COD | Split payment | Partially paid upon delivery |
"FedEx Collect allows our retail warehouses to leverage our high-volume discounts across all our vendor shipments. This saves us roughly 20% compared to if vendors prepaid ground shipping themselves." — VP of Logistics, Major US Retailer
Without FedEx Collect, recipients lose oversight of vendor shipments and pay higher rates as each vendor would prepay FedEx individually without volume incentives.
Key FedEx Collect Benefits
FedEx Collect provides major benefits including:
Cost Savings
- Qualify for the best FedEx Ground rates
- Gain additional discounts off retail rates
- Consolidate volume for maximum incentives
Organization
- Gain visibility and control over all inbound inventory
- Streamline reconciliation and payment
- Access detailed shipment reporting
Efficiency
- Eliminate invoice processing from vendors
- Accelerate order processing times
- Reduce accounting workload
These perks allow entities from big-box retailers to auto part distributors to save immensely while coordinating warehouses and optimizing inventory allocation.
Ideal Users of FedEx Collect
While most B2B shippers can utilize Collect, these businesses prove especially strategic fits:
- Manufacturing: Streamline parts/components shipments from suppliers
- Warehousing/3PL: Centralize and reduce vendor freight costs
- Distribution: Combine facility volumes for maximum discounts
- Retail: Lower cumulative inventory delivery spend
Why FedEx Collect Still Matters in 2024
In 2024, average small parcel shipping rates are forecasted to increase 4-5%. This makes savings solutions like FedEx Collect essential for high-volume recipients focused on cost-efficiency.
Additionally, 76% of businesses indicate that inbound shipping is harder to control than outbound. And 92% say managing inbound freight from multiple vendors is challenging.
FedEx Collect eases this freight oversight challenge while providing much needed discounts as rates climb — two factors that bolster its value in 2024.
Conclusion
FedEx Collect enables businesses to gain financial and operational control over rising inbound inventory shipments. It reduces costs through leveraged discounts, provides visibility into vendor freight, and improves shipment processing efficiency.
Given accelerating package volumes and shipping rates, FedEx Collect is an indispensable program for high-volume manufacturers, warehouses, distributors and retailers in 2024.
