For the second year in a row, UPS and FedEx will enforce peak season surcharges that will impact shipping costs for e-commerce businesses this holiday season. Peak season charges are here to stay, and there is no getting around this so let’s dive into the details.
Fortunately, FedEx will not apply peak season surcharges to most residential deliveries, except for packages that are oversized, unauthorized, or those that require additional handling between November 19 and December 24.
In contrast to FedEx, UPS will be applying peak season surcharges on residential deliveries. Shippers will be paying a surcharge on residential ground shipments from November 18 through December 1 and then again from December 16 through December 22. UPS peak season surcharges are intended to help meet the expectations of customers and help offset the additional operating costs incurred in this busy time of year.
UPS ground services will be charged $0.28 per package for most residential shipments using ground services. For UPS air services the fees are as high as $0.99 per package. Plus additional costs for large packages, additional handling, and over maximum limits fees.
How to minimize the pain
All shippers will feel the impact of these peak season surcharges, so how can we minimize the full impact?
Early Shipping Discounts
- Retailers that only use UPS can offer a discount for products shipped December 3nd to the 14th. This will eliminate the additional residential discount as well as equalize the spike in sales so close to Christmas.
- The U.S. Postal Service is not charging additional delivery fees during the holiday season nor is there any additional cost for residential delivery.
Use FedEx Home Delivery
- If you are one of the many shippers with both carriers at your disposal, FedEx Home Delivery for residential ground shipments might be the more economical option from December 17th to the 21st.
Encourage business addresses
- Entice your customers to ship to a business address during check out. This will completely eliminate any residential fee and also lessen the impact of those dreaded holiday porch pirates.
Audit your invoices for late deliveries
- The very core of any online seller’s shipping strategy is the need for your customers’ package to arrive as promised. Every ground and express package you send is guaranteed to arrive on time or it’s free, but be aware of the exceptions that are issued during the holiday season. Check out the FedEx exceptions or contact Refund Retriever for more information.
Most shippers will either eat these surcharges or pass it on to the customer with an increase in shipping costs. Before you find yourself buried in the holiday shipping season, be sure to audit your shipping invoices to understand when you are getting hit with these surcharges. Adjust your shipping strategy by leveraging different carriers or with business rules to apply least-cost shipping with the right shipping software.