Making Sense of the New Peak Season Surcharges from UPS
This upcoming holiday season, shippers will be paying even more for deliveries made by UPS. During selected weeks in November and December, UPS will be introducing their new peak shipping charges. These charges, which will be published on September 1, 2017, apply mostly to U.S Residential, large packages, and packages Over Maximum Limits. Shippers will need to be aware of when they are shipping larger residential packages so they can avoid the peak season surcharges.
During last year’s holiday season, UPS’s daily volume was more than 30 million packages on more than half of the shipping days. The company hired almost 100,000 season employees during the peak season. It is expected that shipping volume will match or exceed that this year.
UPS explains that in order to meet the doubled daily volume during this busy shipping time, the higher charge will help ensure UPS keeps up with consumer demand and provides on-time delivery. Shipments that are larger, heavier, or unconventional shapes create more complex operations, adding to the cost per package to ship. Since UPS employs additional sorting and delivery personnel, increased air and truck cargo capacity, and temporary facilities during this time of year, the surcharge will go towards financing these additions.
The new peak charges for 2017 are as follows:
|Nov 19 to
|Nov 26 to
|Dec 3 to Dec 9||Dec 10 to
|Dec 17 to
|UPS Next Day Air® Residential||n/a||n/a||n/a||n/a||$0.81|
|UPS 2nd Day Air® Residential||n/a||n/a||n/a||n/a||$0.97|
|UPS 3 Day Select® Residential||n/a||n/a||n/a||n/a||$0.97|
n/a = no additional charge during this period
For example, a package that weighs one pound in a Zone 2 shipment that ships via 3 Day Select will increase almost 10%—from $9.90 to $11.07. Multiply that by 10 similar boxes you need to ship, and you just incurred fees in excess of $110!
One concern for non-ecommerce customers is that the surcharge will impact them as well. These are customers that regularly use UPS and might be hit with the extra charge too. Those companies that do not do additional business during peak season, such as prescription drug businesses, will also be affected by the surcharge, even though their shipping volume will remain consistent.
What can shippers do to minimize the impact of the peak season surcharge?
- Be aware of the sizes you are shipping and if they will be affected by the surcharge.
- If possible, ship before or after the highest peak season time (December 17-23).
- If you are taking orders past December 17th, consider charging more to the consumer to help absorb the cost.
- When shipping packages that are larger than the published maximum size limits, consider UPS Freight.
The UPS peak surcharge is sure to affect millions of packages sent during the holiday season of 2017. It is highly likely that Fed Ex will follow suit by raising their peak season rates as well.