Summer is barely winding down and already attention has turned to the upcoming holiday season. A few months ago, United Parcel Service, inc (UPS) shared its plans to add surcharges on residential packages during peak weeks across the holiday season. A 27-cent surcharge per package will apply to UPS® ground service from Nov. 19 to Dec. 2 and between Dec. 17 and Dec. 23. FedEx, Corp., the shipping rival to UPS®, attempts to undermine the competition by eliminating most residential surcharges. In an announcement on August 3rd, FedEx shared it would be dropping most holiday fees for packages delivered to homes during the seasonal rush. According to Reuters, UPS® declined to comment on FedEx’s® surcharges, but said its own peak-season pricing makes sure it’s “appropriately compensated for the high value we provide at a time when the company must double daily delivery volume for six-to-seven consecutive weeks to meet customer demands.”
Both shipping carriers discourage oversized shipments
Shipping carriers are taking extra measures to brace themselves for the seasonal surge in online shopping. Not only has e-commerce shopping grown in popularity, but purchasing oversized items has contributed to logistical problems. Both companies are trying to discourage oversized, heavy shipments because they require additional handling and major adjustments to mapping out logistics. If you plan to order that treadmill to burn off all those delicious holiday meals, be prepared for hefty fees to cover the cost of logistical inconveniences. FedEx Express® and FedEx Ground® in the U.S. will charge an extra $300 for parcels that exceed its maximum weight limit. Although, FedEx® wouldn’t be implementing blanket surcharges, the package-delivery giant will recover some costs though these additional fees since oversize packages account for approximately 10 percent of its ground-shipping volume during the holiday rush leading up to Black Friday and through Christmas Eve. FedEx® shared the number of oversized packages moving through their network during the holiday months has increased 240 percent over the past ten years. FedEx® continues to encourage Congress to approve the nationwide use of twin 33-foot trailers opening up more options for logistics.
Shipping carriers navigate the implications of reduced foot traffic to stores
Removing the trip to the store for consumers comes at a cost to online retailers and shipping carriers. Instead of bulk shipments to retailers, which streamlines the delivery process, now carriers have to adjust to the increasing demand for individual shipments delivered to residential addresses. Carriers manage the shipping influx by enlisting more air and land transportation vehicles and mobilizing a massive seasonal workforce.
Will this change influence the shipping carrier you choose? Use Share a Refund to find out. Get in touch with our parcel contract optimization team and get a free assessment on the expected costs related to this new surcharge.
