UPS Adds Peak Delivery Surcharge to Manage E-commerce Demand

From The Wall Street Journal:

Starting May 31, UPS is adding surcharges on customers whose weekly volume of shipments using its lower-priced service has blown through what they were shipping in February.

The surcharge adds 30 cents on each package shipped under UPS Ground and SurePost, the service in which UPS drops packages at the Postal Service for delivery to homes. The added fee kicks in only on shippers that topped their average weekly volume in February by more than 25,000 packages.

The average revenue per domestic package was $6.44 at UPS in the first quarter.

Another surcharge adds $31.45 onto each large package shipped, which could hit items like desks, patio umbrellas and trampolines that have been popular online purchases during lockdowns across the U.S. as millions of people work from home, redecorate and try to entertain their children. That fee would apply to shippers after they ship more than 500 large packages in a week.

Both surcharges will be in effect until further notice….

Unless your business ships more than 25,000 UPS packages per month, it won’t directly impact you. One thing that did immediately come to mind when I read this article is those who use the shipping rates provided by Amazon. Those are likely massive-volume accounts that every seller uses for their MFN (merchant-fulfilled) orders1Shipments using these accounts generally appear as coming from Amazon, Amazon for Merchants, or some variant thereof. I can imagine that there are over 25,000 shipments generated in a month collectively using Amazon’s UPS accounts.

On the flip side, $0.30 isn’t a lot. I’m surprised it’s not more.

During normal times, I could easily argue that USPS would be more cost-effective, but they’re literally being looted. It’s all a mess.

Last Updated: February, 7th, 2021 at 07:19 pm UTC
Johnathan Lyman

Johnathan Lyman

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