UPS Implements New Fees and Rate Increases – Will the Other Players Follow Suit?

| By Jim Haller | Senior Manager, Parcel Spend Optimization | Chainalytics |

Following a very subtly posted statement in early May, UPS imposed additional fees and rate increases effective Monday, June 4th.

The new fees apply to shipments that are considered “Over Maximum Limits” and “Oversize Pallet Handling,” both of which will see a surcharge increase of $150 per shipment. Furthermore, the parcel giant has also created a Charge Correction Audit Fee that will be assess if shipping charge corrections within an invoice week exceed $5.00. Depending on the invoice week, the fee will range from $1.00 per package or 6% of the the total charge correction.

Any business who has consistently utilized UPS’ services in recent years will most likely find the increases to be S.O.P., for this has remained a consistent element to the parcel industry for some time. Furthermore, it makes sense that UPS would place additional focus on Oversized and Over Maximum shipments due to the fact more and more of these products are making their way into parcel network as e-commerce has not only changed how people buy goods but also the method and timeliness in which they expect them to arrive (Thanks Amazon!).

This is not the first time UPS has increased the fees for Oversized and Over Maximum deliveries, so one has to wonder if the constant rate changes are more of a deterrent to keep shippers from using the UPS network to move these items to customers. If so, organizations will need to place more emphasis on optimizing their last mile strategy to avoid busting budgets brought on by ongoing surcharges.

While FedEx or the USPS have yet to release any additional news concerning their own rate increases, history suggests you may see something comparable from them in the near future. Purolator, the Canadian-based courier, has already begun seasonal fuel surcharges that will gradually increase as the summer stretches on, but they have yet to mention any other permanent rate hikes. UPS has also announced fuel surcharges effective June 11, 2018.   

With online sales increasing year after year, combined with the expansive shuttering of brick and mortar retail locations, organizations can no longer afford to employ a single parcel strategy. Similar to traditional freight procurement, shippers need to diversify their carrier portfolio in order to optimize their networks, maintain service expectations, and realize true cost savings. With H2 of 2018 just around the corner, now is the time to seek the expertise of transportation experts who specialize in this transportation mode.

Chainalytics Senior Manager Jim Haller leads the firm’s Parcel Spend Optimization offering, which enables multi-level organizations to reduce costs, improve service levels, negotiate better pricing agreements and generate cost savings of 8-15 percent on their parcel spend. 

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