UPS Rate Guide Updates, FedEx, and the Parcel Landscape
A version of this article appears at parcelindustry.com.
So, what has changed?
The short answer: not much. But the effects are nonetheless notable and worth a review.
The revisions and addendums to the Daily Rates guide, the first changes since a May 1 update, focus on formalizing the already well-publicized Peak Surcharges applied within certain weeks between Nov. 19 and Dec. 23. A recap of those charges:
- On residential packages, fees of $0.27, $0.81, or $0.97 depending on Service Level, and $2.99 for shipments to domestic destinations outside the 48 contiguous states.
- For large domestic packages, those between 130 and 165 inches in combined length plus girth, a surcharge of $24 will be applied.
- On domestic Over Maximum Limits packages – those more than 150 pounds, longer than 108 inches, or over 165 inches in length plus girth – an increase to $249 from the non-peak $150 rate.
- Also added was the Aug. 15 update on imports from certain destinations from an expanded peak season window that started Sept. 17.
By releasing this update, the assumption might be that UPS is done revising or amending Peak Surcharge parameters. However, that’s not a certainty and UPS points customers to its web page where “details regarding applicable periods and amounts of Peak Surcharges will be available on an ongoing basis” as a caveat.
Still, with the new rates codified in the guide, you can now more confidently gauge the impact these surcharges will have on your total cost of goods based on your historical peak season shipping profile. Get your personalized peak season impact analysis.
What about GRI?
There was some speculation that UPS might bundle their 2018 General Rate Increase announcement with this update. Last year, the carrier introduced its GRI ahead of its historical schedule on Sept. 1, too, coincidentally.
Instead, as of this writing we’re still waiting for that news, which should come soon from both UPS and FedEx. Now’s the time to prepare before the effects of those increases are felt in the new year.
Speaking of FedEx and the peak season…
Let’s face it, when it comes to peak season publicity, FedEx won the messaging war.
When it announced in early August that it wouldn’t match UPS in establishing peak season surcharges, media from coast-to-coast trumpeted FedEx’s pro-consumer response in contrast to UPS. That’s because FedEx’s public relations strategy was aggressive in highlighting that it wouldn’t be charging extra on most packages during the peak season. It was also misleading because FedEx will add sizeable increases between Nov. 20 and Dec. 24 to some high-impact existing surcharges, including:
- the Additional Handling Surcharge (a $3 per package raise to $14);
- the Ground Unauthorized Package Charge (a $300 increase per package to $415);
- and, most notably, the Oversize Charge (an increase of $25 per package to $97.50) – which FedEx says affects 10% of its ground volume during the holidays.
The fact is, after my team analyzed the shipping profiles and ran 2016 peak season shipping data of the 3,300 businesses we work with through our parcel intelligence simulation engine, FedEx’s fee increases actually are costlier than UPS’ Peak Surcharges to comparable shippers.
That’s why data matters more than words. In the end, that might be the most important takeaway.
Andrew Brueckner is VeriShip’s Chief Customer Officer. Backed by a team of data scientists and 10+ years of benchmarking data, Andy and his team work with shippers to understand and optimize their carrier contracts.