Each year, shippers anticipate the announcement of UPS’s demand, or “peak,” surcharges—additional costs applied during the busiest shipping periods. These surcharges have become a critical part of carrier pricing strategy, and businesses must factor them into their logistics planning and budgets well in advance of the holiday season.
But this year, UPS has broken from precedent. While in 2024 the company announced peak/demand fees as early as mid-July (covering the period from September 29, 2024, through January 18, 2025), UPS has yet to release the comparable fee schedule for the 2025 season. This delay raises important questions about whether the company is intentionally holding back the announcement to limit shippers’ ability to prepare, negotiate, or secure reductions.
What Are UPS Demand Surcharges?
UPS Demand Surcharges are extra fees layered on top of standard shipping costs during periods of high demand—most notably the holiday peak season. These surcharges are designed to help UPS manage the additional costs and complexities of handling surging package volumes, while also serving as a significant revenue lever.
The specific surcharge applied depends on the shipment’s origin, destination, service level, and package characteristics. The following are common types of UPS demand surcharges:
- Additional Handling: Charged for packages that are irregularly shaped, oversized, or require special handling beyond normal operations.
- Large Package Surcharge: Applied when shipments exceed UPS’s published size and weight limits.
- Over Maximum Limits Surcharge: Enforced when a package surpasses the company’s maximum allowable dimensions or weight thresholds.
- Demand Surcharge for Residential, Air, and SurePost: Applied to certain UPS Ground Residential, Air Residential, and SurePost shipments. For high-volume shippers, these can escalate into tiered, volume-based surcharges.
How Demand Surcharges Work
Demand surcharges are stacked on top of standard shipping rates and calculated according to the nature of the package and the route. These fees have become an increasingly significant factor for shippers. For some businesses, the surcharges can add millions of dollars in seasonal shipping expenses, making visibility and predictability essential for planning.
Why the Delay in Announcing 2025 Fees?
Historically, UPS has provided months of advance notice for its demand surcharges. In July 2024, the company announced peak fees covering a nearly four-month window—from late September through mid-January. This gave shippers time to:
- Analyze the cost impact
- Negotiate discounts or waivers
- Adjust shipping strategies, such as shifting volume between carriers or alternative delivery methods
So far in 2025, UPS has not released a comparable announcement. This silence is telling.
Our belief is that UPS may be deliberately delaying the release of its demand surcharge schedule in order to:
- Reduce Negotiation Opportunities: By waiting until closer to peak season, UPS leaves shippers with less time to push for reductions or concessions. Fewer weeks on the calendar means fewer opportunities to pressure the carrier into adjusting its terms.
- Limit Competitive Comparisons: If UPS withholds its surcharge details, it also limits shippers’ ability to compare its fees against FedEx or regional carriers. This tactic could help prevent customers from quickly moving volume elsewhere.
- Preserve Pricing Leverage: As long as the surcharge isn’t published, it technically doesn’t exist. That gives UPS cover against requests for early negotiations and keeps the playing field tilted in its favor.
The Implications for Shippers
If UPS continues this strategy, businesses could find themselves scrambling to absorb higher-than-expected costs with little time to react. For large shippers, the inability to forecast expenses months ahead undermines budgeting, contract negotiations, and overall supply chain strategy.
Ultimately, while demand surcharges are positioned as a way for UPS to manage operational strain during peak season, the timing of their announcement has now become part of the negotiation game itself. The later UPS waits, the more constrained its customers become.
Conclusion
UPS Demand Surcharges are not new—they have long been a part of the company’s peak season strategy. What is new, however, is the strategic delay in announcing them. By withholding details on the 2025 fee schedule, UPS may be intentionally reducing its customers’ ability to plan, negotiate, or seek alternatives.
Shippers should be aware of this dynamic and prepare for the possibility that UPS’s eventual fees may arrive later than usual, with little room left for adjustment. In this environment, early engagement with alternative carriers and proactive cost modeling may be the only way to safeguard against UPS’s pricing tactics.
Thomas Andersen is Partner/Executive Vice President of Supply Chain Service for LJM Group. Since 1998, LJM is a premier partner for businesses aiming to control parcel shipping costs. As experts in parcel data analytics, contract optimization, and invoice auditing, LJM offers solutions that reduce expenses and improve efficiencies, uncovering savings without disrupting their operations. Please visit the website at myLJM.com or to contact Thomas, please call 631.844.9500 or email tandersen@myLJM.com.
