UPS Announces NEW Peak Season Surcharges

UPS Announces NEW Peak Season Surcharges

On Friday August 7th, UPS announced additional “Peak Season” Surcharges in an effort to improve their financial standing and to offset increased costs to hire new workers and secure additional capacity for both air and ground residential shipments and UPS Sure Post packages for all US origins and destinations.  These additional surcharges will become effective on November 15, 2020 and will continue through January 16, 2021.

The surcharge increases will apply during the Peak shipping season outlined above for shippers whose package volume exceeds 25,000 packages per week.  So yes, that’s right, UPS will be targeting all of their largest parcel shippers with these new surcharges, including, but not limited to Amazon, Target as well as others.

UPS Sure Post: A surcharge of $1.00 per package will apply if the shipper’s volume increases between 110% to 200%.  A $2.00 per package surcharge will apply if the volume increases between 200 and 300% and a $3.00 per package surcharge will apply if the volume increases over 300%.

UPS Ground Residential: A surcharge of $1.00 per package will apply if the shipper’s volume increases between 110% to 200%.  A $2.00 per package surcharge will apply if the volume increases between 200 and 300% and a $3.00 per package surcharge will apply if the volume increases over 300%.

UPS Next Day Air Residential: A surcharge of $2.00 per package will apply if the shipper’s volume increases between 110% to 200%.  A $3.00 per package surcharge will apply if the volume increases between 200 and 300% and a $4.00 per package surcharge will apply if the volume increases over 300%. 

All Other UPS Residential: A surcharge of $2.00 per package will apply if the shipper’s volume increases between 110% to 200%.  A $3.00 per package surcharge will apply if the volume increases between 200 and 300% and a $4.00 per package surcharge will apply if the volume increases over 300%.

One very important fact to point out here is that the increases will be based on the shipper’s actual shipping volumes for the period from February 2, 2020 through February 29, 2020.  A time when many businesses were just starting to feel the effects of Covid-19 shutdowns. 

UPS will also add additional surcharges for the following services.  These surcharges will be effective from October 4, 2020 through January 16, 2020.

Additional Handling Charges: $5.00 per package 

Large Package Surcharge: $50.00 Per Package

Over Maximum Limits: $250.00 Per Package

The Additional Handling and Large Package Surcharge will apply to those shippers who ship more than 1000 total packages in any week during the peak period, or ship more than 10 packages combined that are large packages, Over Maximum Limits, or require Additional Handling in any week during the peak period.

Recently, UPS’ new Chief Executive Officer, Carol Tome stated that the company would take a more aggressive approach to price increases on large shippers in order to ensure UPS can manage capacity levels.  “While retailers may squawk at price increases that come their way, large retailers have a way to spread that across and nobody knows.”  

Well, that may be true but we expect that these increases will ultimately be borne by the ultimate consumer in terms of higher product cost and perhaps even, having to pay shipping charges for the first time.  Only time will tell.  

So, if these additional surcharges are being implemented to ensure UPS can handle the increased capacity without creating major bottlenecks, how soon after Peak Season will they re-instate their Guaranteed Service Refund program?  

As of this writing, FedEx did not have any comments about their competitor’s announcement, however we expect we will hear from them in the not-to-distant future.

Have you downloaded our UPS/FedEx Rate Comparison charges yet?  If not, be sure to download them out here

Worried about what the UPS surcharges mean for your business?  Learn now to take control of rising shipping costs