Today’s Pickup: UPS to add peak season surcharge

UPS delivery truck

Good day,

UPS has announced it will implement a peak surcharge on shipments during certain weeks this holiday season. The surcharge will apply to U.S. residential, large packages and packages over maximum limits during the months of November and December.

UPS said the decision is necessary to help cover the costs of acquiring additional capacity during these busy shipping times, which often comes at a premium price. “Our goal is to help every customer obtain the delivery capacity they need, combined with predictable and timely service they count on from UPS, even when there is limited capacity in the UPS network.” Alan Gershenhorn, chief commercial officer, said.

The charges include an 82-cents surcharge on Next Day Air residential delivery between Dec. 17 and 23; 97-cent surcharge on 2nd Day Air and 3-Day Select residential deliveries between Dec. 17 and 23; and a 27-cent surcharge on ground residential deliveries between Nov. 19 and Dec. 2 and Dec. 17 to 23.

For example, a five-pound UPS Next Day Air package shipped from Atlanta, GA to a residential address in Philadelphia, PA, will increase about one percent, compared to non-peak shipping times, the company explained. A similar package shipped to a commercial address would experience no additional cost.

From November 19 through December 23, UPS will also apply peak surcharges to large packages and packages that exceed maximum size limits. These charges are in addition to normal surcharges applicable to such packages.

In addition, UPS will apply a peak surcharge on specific international air shipping lanes during certain periods of the year.

Did you know?

During the 2016 holiday season, UPS shipped an average of 30 million packages per day on peak days, compared to just 19 million on non-peak days.

Quotable:

“We’re focused on helping our customers achieve success during some of their most important selling seasons. To meet their requirements, UPS flexes its delivery network to process near double our already massive regular daily volume, and that creates exceptional demands.”

- Alan Gershenhorn, UPS Chief Commercial Officer, explaining the company’s peak surcharge

In other news:

More digital tools in supply chain

Amazon’s proposed purchase of Whole Foods could bring new digital tools to the supply chain, particularly in the food industry which has time constraints, says a leading supply chain expert. (Wall Street Journal)

Housing starts fall for 3rd straight month

For the third straight month, new home construction has fallen, dropping 5.5% in May, led by multi-family housing starts which dropped 9.8%. (Equipment World Magazine)

Market conditions suggest more rate pressure

Carriers saw improved market conditions for April, according to FTR’s Trucking Conditions Index. The Index climbed more than 4 points, suggesting upward pressure on rates. (CCJ)

Fuel prices could continue to drop

Wells that have been drilled but are not yet being utilized could provide a boost to U.S. shale production and potentially drive down crude oil and fuel prices later this year. (Bloomberg)

British exports take a hit despite low currency value

The traditional theory has been that when currency prices fall, a country’s exports are more desirable. But what is happening in Britain is not following the norm. (Supply Chain Brain)

Final Thoughts

UPS’s announcement of a peak surcharge on shipments during certain weeks of the holiday season gives shippers a decision: do they absorb that charge, do they pass it along to customers, or do they raise prices across the board or offer fewer discounts to cover it? In the end, consumers will make that decision with their pocketbooks.

Hammer down everyone!