Monday, June 19, 2017

UPS ADDS DELIVERY SURCHARGE FOR BLACK FRIDAY AND CHRISTMAS

UPS to Add Delivery Surcharges for Black Friday, Christmas Orders

UPS seeks to recoup increase in hiring and reserving extra trucks during busiest period



By

Holiday shopping is about to get more expensive.
United Parcel Service Inc. for the first time will tack a surcharge onto most online orders shipping around the Black Friday shopping weekend and during the week before Christmas. It is the latest attempt by the large delivery company to recoup the massive increase in hiring and reserving extra trucks and plans during the busiest times.
The changes puts retailers, who are struggling to adapt to a world where more people shop online, facing the prospect of either eating the higher charge or trying to recoup it by raising prices.
UPS UPS -0.03% on Monday said the surcharge will be 27 cents a package for all ground shipments to homes sent between Nov. 19 and Dec. 2, which includes some of the busiest online shopping days. Ground orders typically arrive within five days and are a heavily used shipping option during that time since shoppers don’t necessarily need the items quickly.
The peak surcharges go away for the next two weeks, when shoppers typically take a pause, but return for the final holiday rush. From Dec. 17-23, UPS will charge an extra 27 cents for each ground shipment, 81 cents for next day air, and 97 cents for two- or three-day delivery.
The charge only applies to residential deliveries, so retailers and shoppers may be able to avoid the charges by getting orders shipping to stores, an option retailers have been pushing for the past few years with varying success.
Chief Commercial Officer Alan Gershenhorn said the per-package cost will only “marginally increase” during this time. As an example, UPS said a five-pound next-day air package from Atlanta to Philadelphia will cost 1% more to ship.
The surcharge, however, will provide a much bigger haul to UPS, whose daily volume swells to more than 30 million in the weeks before Christmas versus more than 19 million on a normal day.
UPS will also impose surcharges on all large packages, which cost more to ship and sort, throughout the entire period. It is encouraging shippers to instead send such packages through its freight network, where it recently imposed a second 4.9% increase in the past year.
UPS’s main rival FedEx doesn’t have a surcharge during the holidays, although the two carriers often match each other on pricing moves. A FedEx spokesman on Monday declined comment.
Write to Paul Ziobro at Paul.Ziobro@wsj.com