Did you hear? UPS is adding a major new surcharge for the holidays. Businesses will now have to pay a per-package fee between $0.27 and $0.97 to send goods in November and December. The total amount depends on service levels with the carrier.
FedEx and UPS frequently make changes to their rates, so these new fees don’t come as a surprise to many companies, but it does present a new expense during the year’s busiest season.
First announced in June, the new peak surcharge has been updated twice to expand the geographic range of the fee. Additionally, UPS is adding fees to packages originating from China or Hong Kong; oversized or excessively heavy packages; and shipments going to Alaska, Hawaii, or Puerto Rico.
UPS is the only major carrier to announce a peak surcharge fee. FedEx will not impose a per-package surcharge this year. Instead, the carrier will increase its charges for packages that are oversized, unauthorized, and require additional handling. FedEx and UPS have typically moved in unison to raise ground delivery rates since 2006.
Here is a breakdown of what you’ll pay for the new surcharges:
United States Domestic Peak Surcharges
| Service Level | Nov. 19 – Nov. 25 | Nov. 26 – Dec. 2 | Dec. 3 – Dec. 9 | Dec. 10 – Dec. 16 | Dec. 17 – Dec. 23 |
| UPS Next Day Air, UPS Next Day Air Early, UPS Next Day Air Saver | None | None | None | None | $0.81 |
| UPS 2nd Day Air UPS 2nd Day Air A.M. UPS 3 Day Select | None | None | None | None | $0.97 |
| 3 Day Select – Residential | None | None | None | None | $0.97 |
| UPS Ground (including UPS Ground with Freight Pricing) | $0.27 | $0.27 | None | None | $0.27 |
You might notice there’s no surcharge from Dec. 3 to Dec. 16. This is intentional on the carrier’s part. Most packages ship in the weeks leading up to Black Friday and week before Christmas. Carriers simply aren’t as busy at this time.Running promotions and specials to take advantage of this window could be a good strategy to avoid extra costs.
Related: Comparing Shipping Rates in 2018: FedEx vs. UPS vs. DHL vs. USPS
Additional Peak Surcharges From UPS
| Nov. 19 – Nov. 25 | Nov. 26 – Dec. 2 | Dec. 3 – Dec. 9 | Dec. 10 – Dec. 16 | Dec. 17 – Dec. 23 | |
| Packages shipped from the continental US to Alaska, Hawaii or Puerto Rico | $2.99 | $2.99 | None | None | $2.99 |
| Large Packages | $24.00 | $24.00 | $24.00 | $24.00 | $24.00 |
| Packages over maximum limits | $249 | $249 | $249 | $249 | $249 |
Why Impose a Surcharge?
The new fees are based purely on offsetting internal costs. A boom in eCommerce sales and shipping activities around the holiday means UPS has to hire more workers, acquire more vehicles, and run more routes.This new surcharge is simply a way of passing these costs along to consumers.
“We’re focused on helping our customers achieve success during some of their most important selling seasons,” Alan Gershenhorn, UPS Chief Commercial Officer, said in a news release. “To meet their requirements, UPS flexes its delivery network to process near double our already massive regular daily volume, and that creates exceptional demands.”
UPS could generate tens of millions of dollars in revenue, analysts tell the Wall Street Journal. But if you’re a smaller company, these little fees can put a pinch on already smaller margins. Customers are already hesitant to pay anything for shipping — adding another cost could mean losing revenue.
Leveling the Playing Field
Large carriers, such as Amazon and Walmart, may be able to get these surcharges waived or reduced, along with any other price increases, because of their large buying power. So far, UPS has not been super flexible in waiving surcharges in our experience.
Having a trusted partner on your side, like Reveel, can help you navigate your shipping contracts and make sure you’re only paying what you have to. We can shed light on what is happening in the market, and work with you to combat some of these changes.
Here’s a snapshot of ways we help businesses lower their shipping costs:
- Contract negotiation services to ensure you’re getting the best pricing
- Invoice auditing that provides a 45-point analysis to ensure there are no incorrect charges or fees
- Reporting and analytics that can identify valuable savings opportunities
- Expert insight that provides transparency within the industry
Founded by former DHL sales executives, Reveel was created to level the playing field. Our zero-risk services have saved clients millions of dollars since 2006. Wondering how much you can save on shipping costs? Find out how you can save thousands of dollars by understanding your shipment data.
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