UPS to Implement a 5.9% Shipping Rate Hike Alongside Nearly Double Peak Surcharges
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In a recent announcement, UPS has disclosed its plans for annual rate increases and peak season surcharges, set to take effect in the near future. Starting from December 26, the renowned courier company will implement an average rate hike of 5.9% for its Ground, Air, and International services.
This rate adjustment aligns with FedEx's recently revealed rate increase and represents a somewhat milder increment compared to the 6.9% increase witnessed in the previous year. UPS has stated that this rate adjustment is aimed at supporting its ongoing expansion efforts and enhancing its operational capabilities, all in pursuit of maintaining the high service standards that customers have come to expect from the company.
In addition to the rate increase, UPS has also outlined its surcharge schedule for the upcoming peak season, showcasing an uptick in charges compared to the previous year. These surcharges encompass various categories, including fees for bulky and challenging-to-handle packages, and they are set to come into effect starting in October.
Notably, UPS has specified certain criteria for customers who may be subject to additional handling, large package, and over maximum limits surcharges. These criteria encompass customers who have either:
Been billed for more than 1,000 total packages in any week after February 2020.
Been billed for more than 10 combined large packages or packages requiring additional handling in any week after February 2020.
Signed up for a new UPS account after December 31, 2020.
Furthermore, the demand surcharge structure employed by UPS closely resembles that of its competitor FedEx. It specifically targets high-volume shippers who experience a surge in demand during the peak season. This surcharge applies to customers who have been billed for over 20,000 packages in any given week after October 2022.
The cost of the surcharge for each affected service is contingent on the volume of packages shipped in excess of a customer's "baseline" average weekly volume, which is determined based on the period from June 4 through July 1. In cases where a customer's average weekly volume from September 3 through September 30 falls below 80% of the baseline, UPS will use the latter as the new baseline.
For instance, if a shipper's UPS Ground Residential volume in a given week amounts to 175% of the baseline volume, UPS will apply a surcharge of $2.15 for each Ground Residential package exceeding 105% of the established baseline.
It's essential to note that UPS has clarified that its demand surcharges are subject to change, and the demand periods may be extended or adjusted, highlighting the dynamic nature of the shipping industry.
