Large Parcel Shippers May Bear the Brunt of the increase!
As reported by Supply Chain Drive, and following the lead of FedEx as well as the US Postal Service, UPS has announced their 2022 Peak Season Surcharges. It is expected that UPS’ Peak Season Surcharges will very likely impact high-volume shippers which expect elevated home delivery demand during the holidays.
Beginning Oct. 30, 2022, customers billed for more than 20,000 packages any week after October 2021 will see a “Peak/Demand Surcharge” applied to certain UPS Air Residential, Ground Residential and SurePost shipments, according to the carrier. The fee will be active until Jan. 14, 2023.
The surcharge is applied on a weekly basis to all packages over 105% of the baseline volume for each service. The baseline volume is the customer’s average weekly volume from June 5 through July 2 for the applicable shipping service. But UPS will use the average weekly volume from Sept. 4 to Oct. 2 instead if it is less than 80% of the June-July period’s volume.
UPS per-package peak surcharge, based on shipments over shipper’s ‘baseline volume’
| 105%-125% | 125%- 150% | 150%-200% | 200%-300% | 300%-400% | Over 400% | |
| UPS SurePost | $1.25 | $1.75 | $2.00 | $2.50 | $4.25 | $6.00 |
| UPS Ground Residential | $1.25 | $1.75 | $2.00 | $2.50 | $4.25 | $6.00 |
| UPS Next Day Air Residential | $2.25 | $2.75 | $3.00 | $3.50 | $5.25 | $7.00 |
| All Other UPS Air Residential | $2.25 | $2.75 | $3.00 | $3.50 | $5.25 | $7.00 |
NOTE: Surcharge is active from Oct. 30 until Jan. 14, 2023.
UPS will charge shippers the highest applicable surcharge they reach. For example, if a customer ships 175% of their baseline shipping volume for the Ground Residential service in a given week, they will be charged $2 for all packages that go above 105% in baseline volume.
UPS is also raising its per-package surcharges for additional handling (from $3.50 to $6.50), large packages ($40 to $70) and packages in excess of its maximum shipping limits (no charge to $400) on qualifying customers. The new prices for these surcharges are active from Oct. 2 until Jan. 14, 2023.
Amazon by the way, is also rolling out its inaugural peak season fee on its fulfillment services for third-party sellers.
These Peak Season Surcharges should come as no surprise to parcel shippers, it has become part of the normal course of business. The only thing that changes from time to time is who will announce their Peak Season Surcharges first.
What is critical for parcel shippers however, is determining how to track and more importantly control all of these surcharges, general rate increases, tier discount levels, base level discounts, as well as varying contract terms and conditions, so that costs do not get out of control.
Want more information on how to control your shipping costs, speak to one of our parcel experts today. Call 516 822-1183.
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