What the UPS New Peak Charge Means For Your Business
Retailers and consumers will have a new cost to contend with for the 2017 peak season. For the first time in its history, UPS has announced that it will add a surcharge to deliveries made during much of the holiday season. It remains to be seen how competitors will respond, but shippers must be prepared for the likelihood that the other half of the parcel duopoly FedEx will follow suit. If all peak season shipments are subject to a new surcharge, it will undoubtedly influence how retailers prepare for the all-important holiday period. The fact that Big Brown is only assessing the surcharge on its residential deliveries tells us all we need to know about the decision. It is clearly an attempt to address the rising cost of making deliveries during the busiest part of the year. For example, the chart above shows a typical Thanksgiving spike in orders handled by our team last year. Remember, this is just one client! Spread this scenario across all North American e-commerce and it's easy to see why UPS is testing new ways to address the issue. But how will it impact the most important part of the year for many retailers?
Unpacking the UPS New Peak ChargeThese are some of the key details of what UPS is calling its “New Peak Charge”:
- Surcharge periods: 11/19/17 to 12/2/17 and 12/17/17 to 12/23/17.
- No surcharge applied to deliveries between 12/3/17 to 12/16/17.
- Ground delivery surcharges of 27 cents.
- Next Day Air surcharge of 81 cents.
- 2nd Day Air + 3 Day Select surcharge of 97 cents.
- In the final week before Christmas UPS will only assess surcharges on its "Next Day Air," "2nd Day Air," and "3 Day Select" delivery services.