Business Essentials for Professionals


Increased Delivery Fees During Holiday Season To Be Implement By UPS

Increased Delivery Fees During Holiday Season To Be Implement By UPS
A new fee schedule released by the United Parcel Service Inc, it will be charging significantly  higher fees for shipments of packages from large shippers who want to send significantly more packages through its system during the holiday season even as the novel coronavirus pandemic rages on throughout the world.
Operations at UPS and other large delivery firms have been disrupted by the outbreak of the novel coronavirus pandemic as their delivery networks have been congested with a wide variety of products from food to furniture even as there was suppression in the shipment of  profit making parcels between businesses.
For ground shipments and other lower-priced shipping options, the new fees could total as much as $3 a package, UPS said, while it will charge up to $4 a package for air shipments bound for residences. These hikes in prices were reported forts by the Wall Street Journal.
The new fee structure will however only be applicable to those shippers who will be shipping more than 25,000 packages a week and will be implementable between the middle of November and the middle of January, UPS said.
The company will also be escalating charges with customers sending 110%, 200% and 300% more shipments compared to their average weekly shipping volume in the month of February.
“This could be the last we see of free shipping,” said Cathy Morrow Roberson, founder of Logistics Trends & Insights.
And for struggling retailers, this surge in shipment prices will be yet another blow in the face of declining business at their physical stores due to the Covid-19 pandemic related restrictions on opening up of non-essential businesses, she said. The increase in shipment fees will be particularly taxing on retailers during the holiday shopping season and the retailers could be forced to either absorb the higher shipment costs themselves, or stop subsidizing free shipping or raise prices to include increased shipping costs.
What percentage of their customers would be affected because of the hike in shipping fees was not made clear by UPS.
There were also no comments available from which is the largest customer of UPS as well as a potential rival in the delivery business. 
Measures to manage the boom in lower-margin, e-commerce deliveries have already been taken by UPS and rivals FedEx Corp and DHL each. The rise in e-commerce deliveries meant that the companies were forced to involve more labor and create greater space of delivery on planes, trucks and trains.
A sudden and significant increase in shipment volumes has also put pressure on the United States Postal Service which also delivers large numbers of packages. “They don’t have an infinite amount of capacity,” Morrow Roberson said of U.S. package carriers.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc