Earlier this year, UPS announced its plans for new peak surcharges applicable during defined periods during the holiday season “designed to enable UPS to continue to provide best-in-class value to customers while offsetting some of the additional expenses incurred during significant volume surges.” Even though the first round of these charges went into effect Nov. 19, it’s not too late to review important dates for the rest of the holiday season and plan accordingly.
The first batch of surcharges applies to UPS residential delivery services and include a 27 cent surcharge for UPS Ground deliveries to a residence from Nov. 19 through Dec. 2. UPS will bring that surcharge back from Dec. 17 through Dec. 23, and will also apply an 81-cent surcharge for all Next Day Air packages going to a residence, and 97-cent surcharge for 2nd Day Air and 3 Day Select delivery to a residence. These surcharges apply to packages with origin and destination within the 48 contiguous states and packages with Alaska or Hawaii origin.
From Nov. 19 through Dec. 23, UPS will also apply a surcharge to packages with length plus girth [(2 x width) + (2 x height)] combined over 130 inches:
Over Maximum Limits Packages are also subject to additional fees from Nov. 19 through Dec. 23.
These are packages:
- with an actual weight of 150 pounds, or
- that exceed 108 inches in length, or
- that exceed a total of 165 inches in length plus girth [(2 x width) + ( 2 x height)] combined, as measured to determine their billable weight.
These surcharges pose some issues for ecommerce shippers since this is typically a time of year when free holiday shipping is the norm. For UPS Ground delivery, is it better to pass the 27 cent charge on to customers or for the seller to absorb the extra cost to stay competitive (but while also reducing ROI)? In the case of larger and over-limit shipments, these surcharges are too high to be absorbed by the shipper and must be transferred to the customer.
Working around holiday surcharges
If UPS is part of your shipping strategy and you’d like find ways to lessen the impact of these new peak surcharges, there are few actions you can take.
- Ship with USPS—The U.S. Postal Service is not charging additional delivery fees during the holiday season. It’s also worth noting that the USPS doesn’t use dimensional weight pricing for packages under one cubic foot. They also don’t tack on additional charges for residential delivery or for fuel.
- Business addresses—Try suggesting to your customers that they ship to a business address when making a purchase. Since the UPS holiday surcharges only apply when shipping to a residential address, there is no additional fee required if a package goes to a business. Most ecommerce shopping carts have features (or add-on plugins) that allow you to add messaging to the page using popups, call outs or extra lines of text on specific areas of the page.
- Reward earlier shoppers—Offer larger discounts for orders that you can ship from Dec. 3-16 (when UPS holiday surcharges don’t apply).
If you have any questions about how these UPS holiday surcharges might affect your shipping strategy, please call ShipWorks Support at 1-800-952-7784.