UPS to Add Additional Shipping Fees This Holiday Season
Coronavirus has been a catalyst to the ecommerce market, as consumers increasingly prefer to stay safe at home instead of shopping in person. This quick change in behavior has led to intense strain for major parcel carriers.
Last Friday, UPS announced one method they’re taking to keep up with the demand: additional fees over the holiday season. These new surcharges could reach three dollars a package for ground shipments and four dollars for air.
UPS said these additional fees will apply from November to January but will only apply to customers who ship more than 25,000 packages a week. The surcharges increase as customers send 110%, 200% and 300% more shipments than their average weekly shipping volume in February.
Notably, these fees are significantly higher than the last time UPS instituted additional fees during a peak holiday season, in 2018. Surcharges then reached up to 28 cents on ground shipments and up to 99 cents for air shipments.
According to an internal document circulated before the surcharges were disclosed, UPS informed its sales team that these fees would be used to offset higher costs to hire new workers and to secure additional shipping capacity.
The document explained, “These surcharges help protect our network and ensure UPS is compensated appropriately for additional costs incurred to maintain our high-quality service.”
While shipping consultants predicted some increase in holiday shipping fees, the steep amount was a surprise to all. John Haber, CEO of the supply chain consultant Spend Management Experts Inc, described the fees as “devastating to retailers” and that “it’s getting to a point where I’m starting to consider it gouging.”
One way to adjust to the new fee schedule is to change operations behavior. According to the UPS internal document, they plan to recommend that their customers shift promotions during the holiday season to reduce volume spikes during the busiest times such as around Thanksgiving, and entice shoppers to pick up orders in stores or to have packages delivered to access points like local businesses.
The internal document goes on, “These strategies help UPS decrease disruptions to our network, maintain a steadier stream of volume throughout peak season and may alleviate financial effects of the surcharges for our customers.”
Times like these are when it pays to have an intermediary between your ecommerce business and the giant carriers. Contact us today to save money on your shipping, especially as the holiday season approaches.
