UPS Adds Residential Holiday Shipping Surcharges; FedEx Will Not Follow

08/30/2017 — PartnerShip

The holidays are approaching and that means an increase in small package shipping. If you use UPS for residential Ground shipping, you’ll also see new holiday residential shipping surcharges from the Atlanta-based company.

UPS announced that it will add a 27-cent charge on all Ground residential packages sent between November 19 and December 2. This includes two of the busiest online shopping days of the year, Black Friday, which is November 24 and Cyber Monday, which is November 27.

The charge hibernates for two weeks, then returns December 17 through December 23, during which time all Ground residential deliveries will see the additional 27-cent charge, plus an additional 81-cent charge for next-day air shipments or an additional 97 cents for two-day or three-day delivery.

According to financial news outlet Bloomberg, the surcharges will increase the cost of UPS residential deliveries by roughly 3 percent.

The stated reason for the company’s surcharge increases is that online shopping and e-commerce has grown significantly over the last twenty years and UPS sees a huge influx of packages during the holiday shopping season that puts stress on its systems, processes and machinery. On an average day, UPS processes around 19 million packages but during the holiday season, that number swells to 30 million packages.

In order to meet demand, UPS says it has to add planes, trucks, and thousands of employees; and the surcharges are necessary to offset the additional cost of the holiday package surge.

“UPS’s peak season pricing positions the company to be appropriately compensated for the high value we provide at a time when the company must double daily delivery volume for six to seven consecutive weeks to meet customer demands,” according to Glenn Zaccara, a spokesperson for UPS.

UPS is also adding a Large Package surcharge of $24 and a Over Maximum Limit surcharge of $249. Both of these UPS surcharges are effective November 19 through December 23, 2017.

In a notable departure from UPS, FedEx will not apply residential surcharges this holiday season, except for packages that are big or bulky enough to require special handling.

Between November 20 and December 24, 2017, FedEx Express and FedEx Ground in the U.S. and Canada will increase the additional handling surcharge by $3 per package and $25 per package for oversize packages. The largest surcharge of $415 per package is only applied to packages that exceed the FedEx maximum size limit and cannot move through its sorting equipment.

With the additional handling surcharge for oversized packages, both UPS and FedEx are trying to discourage large and heavy, odd-sized shipments, because they cannot pass through its automated systems and require additional handling. In fact, the volume of oversized packages handled by FedEx Ground has increased 240 percent during the past ten years and is now 10 percent of the ground operation’s volume. This is “largely driven by expansion of e-commerce into sports equipment, furniture, mattresses and other things that weren’t largely available on e-commerce 10 years ago,” according to Patrick Fitzgerald, senior vice president of marketing at FedEx.

It's important to evaluate how you these changes might affect your shipping costs. Through a PartnerShip-managed shipping program, you can receive significant discounts on select FedEx services - resulting in savings that can help to offset cost increases like these. If you're not sure if you qualify for one of our small package shipping programs, contact us and we'll find the solution that's right for you.