Supply Chain Dive: UPS Peak Fees May Impact Major Shippers Anticipating Robust Christmas Demand

Sep 01, 2022

(Image Source: Forbes)

On Friday, UPS unveiled its peak-season fees, which would have an impact on high-volume shippers anticipating increased demand for home delivery over the holiday season. The announcement came after the competing parcel service heavyweights FedEx and the Postal Service revealed their respective price increments.

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According to UPS, a "Peak/Demand Surcharge" will be added to specific UPS Air Residential, Ground Residential, and SurePost shipments starting on October 30 for customers invoiced for more than 20,000 parcels any week after October 2021.

The charge is in effect until January 14, 2023. All packages that exceed 105% of the baseline volume for each service are subject to a weekly fee. The baseline volume is the client's average weekly volume for the relevant shipping service from June 5 through July 2. However, if it is less than 80% of the volume from June to July, UPS will substitute the average weekly volume from Sept. 4 to Oct. 2.

The highest appropriate surcharge reached by UPS will be applied to shippers. For instance, if a client uses the Ground Residential service for a given week and ships 175% of their baseline shipping volume, they will be charged $2 for every box that exceeds their baseline volume of 105%.

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Additionally, UPS is increasing its per-package costs for eligible customers for extra handling (from $3.50 to $6.50), large shipments (from $40 to $70), and goods that exceed its maximum shipping limitations (from no charge to $400). The new surcharge costs will be in effect from October 2 until January 14, 2023.

Source:UPS peak surcharges to affect large shippers expecting strong holiday demand

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