It’s Official: UPS New Peak Surcharges are on the Horizon
Update: On Aug. 3, FedEx announced its response to UPS’ Peak Surcharges by saying it won’t add surcharges to most residential packages between Nov. 20 and Dec. 24.
Still, FedEx will add an extra $3 per package to its Additional Handling Surcharge and increase the Ground Unauthorized Package Charge by $300.
The Oversize Charge will increase by $25, affecting about 10% of its Ground volume during the holiday window, the carrier said.
Recently, I wrote a post discussing how it wouldn’t be unprecedented for carriers to announce a rate increase or new surcharge based on last year’s “Peak Season Surcharges.”
Well, this is now a reality.
On Monday, June 19, UPS announced new Peak Surcharges at various times throughout the year, including the holiday season of November and December.
Carriers have truly learned from the past, and I think it’s safe to assume that UPS executives wished they did this in 2014 after their extremely challenging 2013 holiday season experience.
The ever-evolving world of e-commerce isn’t slowing down anytime soon; rather, it’s growing rapidly and will continue to do so.
Remember, the surcharges are put in place to incentivize retailers to meet their forecasts and prevent increased costs in the future. UPS officially maintains the right to charge retailers who reserve shipping capacity and don’t fulfill their e-commerce targets. Specifically, UPS’ goal is to help cover costs of additional capacity in airplanes and trucks, as well as the cost of setting up temporary facilities and seasonal help.
With this announcement, here are some important dates and information to be aware of:
- Starting Nov. 19, new fees will take effect for certain weeks.
- During Dec. 3–16, there will be no charge for residential ground packages.
- During the week ending Dec. 23, all residential ground and air packages will obtain a surcharge.
- Large packages and items that exceed size limits will accrue surcharges during the holiday season.
- On or before Sept. 1, information on applicable lanes, Peak Surcharges and Peak Periods will be available on the UPS website.
We strongly encourage you to review the UPS Peak Surcharges details in the 2017 rate book and these new charges so you’re aware and prepared.
A look at the Peak Surcharges that will be applied to residential packages shipped during a Peak Period.
It’s imperative that parcel shippers understand their shipping profiles to ensure their agreement is fair, accountable, and a symbiotic relationship for both parties. Data will protect your bottom line.
The time is now for shippers to do everything they can to avoid year-end penalties from the carrier that negatively impact their bottom line. Contact our parcel experts to reassess your carrier agreement with a risk-free surcharge impact analysis.