UPS and FedEx have announced, and continue to update, peak season surcharges for 2021. Initially, peak season occurred once per year between Thanksgiving and Christmas. More recently, though, peak fees are becoming the new norm.
Demand for nation-wide delivery is high, and e-commerce volumes are surging. It is important to analyze the impact of these charges on your spend, and then plan accordingly to ensure shipping costs don’t tank your profits.
UPS Peak Season Surcharges:
UPS continues to target high-volume residential shippers:
Ground Residential and Post shipments will increase at $0.30 per package through October 30, 2021, and then move to $1.15 – $5.15 per package for the remainder of peak (Jan 15, 2022).
o Per package increase based on % increase vs. February 2020 volume
o Must ship 25,000 packages or greater any week after February 2020 to qualify
FedEx Peak Season Surcharges:
Similar to UPS, FedEx is placing emphasis on high-volume residential shippers:
*FedEx shippers with greater than 30,000 average packages per week in January 2021 will qualify for the peak residential delivery surcharge.
As always, the goal is to identify the impact these surcharges will have on annual spend, and then plan appropriately. There are many strategies that can be considered to mitigate the impact of peak season surcharges:
1) Identify which peak surcharges have high financial impact, and negotiate discounts in your agreement
2) Consider optimizing packaging to avoid Additional Handling/Large Package thresholds
3) Offer incentives for customers willing to take advantage of access points or HAL (Hold at location) options to avoid residential fees
If you have any questions on peak season surcharges or are interested to explore your options, reach out to us at support@seekrparcel.com. We’ll perform a review of your account, for free.
