Thursday, October 15, 2015

UPS RAISES FEES AND FUEL SURCHARGE

Is this another effort by UPS to take for granted its e-commerce position?
 

UPS Raises Fees, Fuel Surcharge on Oversized Packages Ahead of Holidays

Company looks to recoup costs of handling larger shipments that have caused delivery logjams

United Parcel Service says it will charge an additional $52.50 for larger and heavier packages and hike fuel surcharges on them to 5.25%. ENLARGE
United Parcel Service says it will charge an additional $52.50 for larger and heavier packages and hike fuel surcharges on them to 5.25%. Photo: Reuters
United Parcel Service Inc. UPS 0.91 % will charge more to ship larger and heavier packages this holiday season and plans to charge a fee for packages that are billed to a third party as it moves to recoup some of the higher costs of handling the larger shipments that are causing delivery logjams.
On Thursday, UPS said as of Nov. 2 it will charge an additional $52.50 for those larger and heavier packages and raise fuel surcharges to 5.25%, from 4.75%, for ground shipping and to 4.50%, from 3%, for air and international shipping.
Currently, UPS charges $57.50 for oversize packages.
UPS has struggled to meet demand—and delivery dates—during the most recent holiday seasons. In 2013, an unexpected surge of online orders overwhelmed its system. Last year, it over-prepared and productivity plummeted.
This time, UPS approached retailers over the summer, alerting them that it planned to charge more for those packages and lower or eliminate discounts and waivers on those extra charges that had been negotiated, typically based on volume assumptions.
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As of Dec. 28, UPS will also raise shipping rates and so-called accessorial rates, extra charges for handling hazardous materials, for example.
And on Jan. 4, it will start charging a 2.5% service fee to packages that are billed to someone other than the shipper or recipient.
Shares, down nearly 7% this year, edged up 0.19% to $104 in late trading.