2021 FedEx, UPS Peak Season Surcharges to Impact Large Packages and High-Volume Residential Shippers - Total Retail
An outcome of the pandemic-accelerated e-commerce boom, the demand for parcel services continues to exceed the supply. Like previous years, network capacity limits will be stretched for all carriers this holiday season and into 2022.
UPS recently put a number on it: the daily demand exceeds the parcel market’s network capacity by 5 million packages per day. Both UPS and FedEx are actively issuing significant off-contract rate increases to some of its largest e-commerce shippers to both increase revenue as well as free up capacity if/when those customers divert parcel traffic to alternate providers.
In addition, both FedEx and UPS have announced “peak” surcharges to apply this holiday season and beyond. While they might initially sound innocuous, detailed analysis reveals these added surcharges pack a wallop. This article seeks to provide shippers with a digestible understanding of announced price increases, as well as offer a handful of suggestions to mitigate the full financial strain of peak surcharges.
An outcome of the pandemic-accelerated e-commerce boom, the demand for parcel services continues to exceed the supply. Like previous years, network capacity limits will be stretched for all carriers this holiday season and into 2022.
UPS recently put a number on it: the daily demand exceeds the parcel market’s network capacity by 5 million packages per day. Both UPS and FedEx are actively issuing significant off-contract rate increases to some of its largest e-commerce shippers to both increase revenue as well as free up capacity if/when those customers divert parcel traffic to alternate providers.
In addition, both FedEx and UPS have announced “peak” surcharges to apply this holiday season and beyond. While they might initially sound innocuous, detailed analysis reveals these added surcharges pack a wallop. This article seeks to provide shippers with a digestible understanding of announced price increases, as well as offer a handful of suggestions to mitigate the full financial strain of peak surcharges.
