UPS plans to crush shipping records this year, but will shippers’ bank accounts be crushed in the process? In an announcement made recently, the shipping giant forecasts a global holiday delivery of more than 750 million packages. These packages will be in transit the 25 days between Thanksgiving and New Year’s Eve and is a projected 5% increase from last year’s holiday peak shipping season volume.
Higher volumes mean higher costs for shippers
On average, UPS handles 19 million packages a day. During the peak holiday season, that number almost doubles to more than 30 million packages a day. Carriers manage the shipping influx by enlisting more air and land transportation vehicles and mobilizing a massive seasonal workforce. Unfortunately, UPS’ seasonal surcharges mean shippers are shouldering the costs needed for that extra capacity required in airplanes and land vehicles, the cost of setting up temporary facilities and hiring thousands of additional seasonal employees. In 2016, UPS announced it had ordered 14 new cargo jets to be delivered between 2017 and 2020 and those big costs are being absorbed by shippers simply trying to get gifts to their friends and family during the holidays.
For shippers who use UPS, a peak season surcharge of 27-cents per package will apply to UPS’ ground service from Nov. 19 to Dec. 2 and between Dec. 17 and Dec. 23. The company claims the surcharges are necessary to offset the additional cost of delivering all those holiday packages. Not only will UPS be hauling your gifts, but they will be hauling in the money too. Citi Research believes that UPS is on pace to post 10 percent full-year operating income growth largely due to charging extra during the peak season.
What else to watch out for
Both UPS and FedEx are trying to discourage oversized, bulky packages because they require additional handling and major adjustments when mapping out logistics. If you plan to order that trampoline to bounce off all those delicious holiday meals, be prepared for serious fees to cover the cost of logistical inconveniences.
Learn more about UPS 2018 rate changes: UPS follows FedEx’s lead with 4.9% rate increase in 2018
With increased rates, it’s more important than ever to reduce costs wherever possible. Visit Share a Refund to stop shipping profits out your door this holiday season.
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