Parcel Shippers, Hold Onto Your Wallets!
As we previously advised at the end of last year, (along with some new rate increases), UPS is preparing to add additional fees, (some folks call them penalties), to shipper invoices when they ship oversized packages as well as packages with mislabeled dimensions through the UPS parcel shipping network.
These additional fees or surcharges as UPS refers to them, will become effective on Monday, June 4, 2018. These new surcharges according to UPS are “not revenue generating charges” as UPS has been increasing these fees regularly to encourage their parcel shipping customers to ship these larger packages through UPS Freight, their LTL freight division. This according to UPS spokesperson, Glenn Zaccara.
The new fees parcel shippers will see are as follows:
Per package Surcharges for pallets and packages heavier than 150 pounds will increase from $500 to $650
- So we must ask, does any shipper need a reason NOT to ship these heavy pieces through UPS’ parcel shipping network? We think NOT!
- To put the magnitude of this increase into perspective, in December of 2017, this fee was increased from $150.00 to $500.00 a 233% increase. Now the $150.00 increase represents a (modest) 30% additional increase making the overall increase a whopping 333% in total. Sure sounds like a penalty to us.
Shippers that mislabel a packages dimensions will be charged an additional $1.00 per package, or six percent of adjusted revenue for a given invoice week as an additional Shipping Charge Correction.
- What’s interesting about this new Shipping Charge Correction is the fact that it will only apply if the average correction is greater than $5.00.
Additional Handling Surcharges are also increasing, however these rates will not go into effect until July 8, 2018, giving shippers a little breathing room between increases. Packages weighing greater than 70 pounds shipped within the US will increase from $12.00 to $19.00 a 58% increase.
Also on July 8, 2018, Large Package Surcharges for Domestic Residential Deliveries will increase from $80.00 to $90.00 a 12% increase.
Increased freight costs for parcel shippers will be a “force to be reckoned with” now and into the future. These continuing increased shipping costs will challenge every parcel shipper to maintain control of their overall shipping spends and certainly put a strain on profitability. It may even challenge the “free shipping” phenomenon. And don’t forget, we will soon be hearing about Peak Season Surcharges for this year.
Yes, it’s hard to believe, but Peak Season shipping will soon be upon us.
Stay tuned as ICC continues to report on any new fee structures and charges to keep our readers in the “know”.
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