UPS and FedEx Peak Surcharges Announced for 2019
09/24/2019 — Jerry Spelic
UPS and FedEx have both announced that they will not apply peak season surcharges on residential deliveries this holiday shipping season. However, both companies will continue peak surcharges on large shipments and those requiring additional handling during the holidays.
During the 2018 holiday season, UPS applied a per package residential peak delivery surcharge of $0.28 for ground and $0.99 for air shipments. This year, the company is leveraging its expanded air and ground capacity, and automated sorting hubs and processing facilities, to pass cost savings on to customers in the form of no residential delivery peak surcharge. More than 75% of UPS's small package volume will pass through these automated facilities in peak 2019.
“We delivered a record-setting 2018 peak season in terms of both on-time delivery performance and operations execution,” said David Abney, UPS Chairman and CEO. “We will build on the lessons learned last year and leverage our new efficient air and ground capacity to make the 2019 peak season another success for customers, investors and other stakeholders.”
This is the third holiday season FedEx has not added additional peak surcharges on residential deliveries. With UPS and FedEx both not applying a residential delivery surcharge this year, it is great news for e-commerce retailers and online shoppers. Online sales are expected to grow 14% to 18% this holiday season, and in the past, these residential delivery surcharges were passed along to shoppers in the form of higher shipping costs.
It’s important to remember that both UPS and FedEx are implementing peak surcharges this holiday season on larger packages and those that require additional handling.
UPS peak surcharges will apply to larger packages from October 1 through January 4:
- $31.45 per package for shipments that qualify as large (a 20% increase from 2018)
- $250.00 per package for shipments that qualify as over maximum limits (a 51.5% increase)
- $3.60 per package for shipments that require additional handling (a 14% increase)
- $37.60 per package for shipments that qualify as oversize (a 36.7% increase from 2018)
- $435.00 per package for shipments that qualify as unauthorized (a 190% increase)
- $4.10 per package for shipments that requires additional handling (a 13.8% increase)
The growth of e-commerce and online shopping for large and awkwardly shaped products such as mattresses and furniture has necessitated these surcharges because heavy and bulky packages can’t move through the automated systems in which UPS and FedEx have heavily invested. Through these surcharges, shippers are paying the price for the loss of efficiency these packages represent.
If you’re a retailer, you should pay close attention to this year’s UPS and FedEx peak season surcharges so you can make any needed changes now to help ensure you remain profitable during the busy holiday shipping (and shopping) season. A good first step would be to look at the large packages you ship and determine which will be impacted by the peak surcharges.
The UPS and FedEx additional handling peak surcharge will be triggered by packages that:
- Weigh more than 70 pounds
- Measure more than 48 inches along its longest side and more than 30 inches along its second-longest side
- Are not enclosed in traditional corrugated cardboard packaging
UPS Over Maximum Limit and FedEx Unauthorized Package surcharges will be triggered by any package that exceeds 150 lbs., 165 inches in length and girth combined, or longer than 108 inches.
Surcharges for these packages are already high; additional UPS and FedEx peak surcharges represent an added dent to your bottom line. When deciding how to ship your small package shipments, or if you should use LTL to ship your oversized or heavy packages, you need an expert on your side. PartnerShip manages shipping programs for over 140 associations, providing exclusive discounts on small package shipments to their members. To find out if you qualify or to learn how you can ship smarter, contact us today.
FedEx and UPS rates will be going up after the holiday season! Make sure you know what to expect so you can mitigate the impact to your bottom line. Our free white paper breaks down where you'll find the highest increases and explains some of the complicated changes you need to be aware of.