UPS has once again announced new peak surcharges. Rate hikes begin as early as July 4, rising again on October 3, and once more on October 31, extending through the traditional holiday season.
- Increasing from $3.00 to $3.50 on July 4.
- Further increasing to $6.00 on October 3 until January 15.
- Increasing from $31.50 to $40.00 on July 4.
- Further increasing to $60.00 on October 3 until January 15.
- Stays at $0.30 for high-volume shippers until October 30.
- Increasing on October 31 to a range of $1.15-$5.15 per piece based on the shipper’s growth in residential shipping compared to February 2020 (not 2021).
- Peak Residential Surcharges for Air services will range from $2.15-$6.15, also based on the percentage above February 2020 volume.
All the details can be found here: https://www.ups.com/assets/resources/media/en_US/2021_UPS_Peak_Surcharges.pdf
These increases, while designed to limit shipments from large e-commerce shippers during the holiday season, are also yet another tactic for UPS to capture as much profit as possible from shippers before COVID is “over.” FedEx is likely to follow suit.
If you are a single-sourced UPS shipper, and these charges apply to your company, you should begin preparations and budgeting immediately.
So, what can shippers do to prepare? There are several strategies available, but the most straightforward is to negotiate discounts on the peak charges. Dual-sourcing or multi-sourcing can also help reduce or eliminate the residential fees during peak. If you traditionally ship many packages during this period, consider using alternative carriers like regionals or the USPS, or offering your customers incentives to buy earlier or delay shipments.
If you are unsure how the above-mentioned changes affect your shipping and your bottom line, Shipware can help. Please reach out to us at www.shipware.com for a complimentary assessment; using your shipping characteristics, we will help you understand where your pricing stands in the marketplace, how you might be affected during the peak season, and potential cost savings we can help you achieve.
