UPS Adds New Fee Up to $1 for Holiday Season Deliveries

Judith Bessette
Junho 20, 2017

United Parcel Service Inc. will place its first holiday-season surcharges on USA packages, as the world's largest package-delivery company seeks to defray a surge in year-end costs.

A fee of 27 cents a package will be levied on deliveries by the residential ground network on certain weeks in November and December, UPS said in a statement Monday. They begin the week of December 17 for faster delivery options such as overnight or 2- or 3-day service.

To meet that demand, UPS said it "acquires on a temporary basis and often at shorter-term premium rates, additional air and truck cargo capacity, temporary facilities, and additional sorting and delivery personnel".

Both UPS and FedEx have spent billions of dollars in upgrading their networks to handle rapidly rising e-commerce package volumes, leaving investors chafing over the expense.

UPS rose less than 1 percent to $110.73 at 12:45 NY.

"With the new peak charge, per-package costs for many shipments will only marginally increase during this very busy time of the year", Chief Commercial Officer Alan Gershenhorn said.

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UPS (ups) wants retailers and their customers to pony up more money for their holiday season packages. But this is the first time UPS has published peak surcharges for US domestic residential package deliveries.

And packages sent via ground to residences will cost an extra 27 cents if shipped November 19-Dec.

UPS typically negotiates higher rates with its major customers and raised rates for individuals.

Like its main rival FedEx Corp, UPS has struggled with the expense of "the last mile" associated with delivering to residential addresses.

It will also add new fees for oversized packages.

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