Every year, carriers like UPS, FedEx, and USPS tack on extra surcharges or temporary price increases during the holiday season. Some of the added costs help the carriers keep up with increased volumes, like UPS’s projected demand exceeding shipping capacity by 5 million parcels this year. What’s more, the effects of the COVID-19 pandemic are still felt by the carriers, causing higher expenditures. For example, global supply chains are still struggling, from raw material shortages and lack of shipping containers to a critical lack of truck drivers and climbing fuel costs.
All of that adds up to higher peak season surcharges for the carriers, including UPS, FedEx, and USPS, as they are forced to recoup their extra expenses. Here are the carriers’ 2021 holiday surcharges and temporary price increases.
One thing that isn’t changing for UPS: their focus on limiting large package volume during peak season. Shippers sending Large Package, Additional Handling, or Over Maximum shipments are going to see higher peak surcharges. According to the UPS Peak Surcharges report:
A Peak Surcharge will apply to packages that require Additional Handling and/or are Large Packages for all U.S. domestic, U.S. import, and U.S. export shipments, for qualifying customers who have shipped more than 1,000 total packages, or more than 10 packages that require Additional Handling or Large Packages, during any week following February 2020.
Those charges for this year’s peak (October 3, 2021 to January 15, 2022):
In addition, shippers who sent more than 25,000 packages (Ground Residential, SurePost, Next Day Air Residential, and All Other Air Residential combined) in any week since February 2020 may qualify for surcharges based on their holiday volume compared to their weekly volume in February 2020. (In other words, your average volume for the last “normal” shipping month before the pandemic’s full effects hit the U.S.) The amount of surcharge depends on the service level.
However, If your average weekly volume from August 29 through October 2, 2021, is less than 80% of your February 2020 volume, UPS will (at its discretion, according to its fine print) use the August 29 through October 2, 2021 numbers to calculate peak surcharges.
Questions? Contact your UPS account manager for more detailed, account-specific information.
FedEx will levy its heftiest surcharges on customers that ship big packages or ship an average volume greater than 25,000 packages per week. From there, FedEx’s surcharge schedule gets a little more complex.
Starting November 1, businesses sending low-weight and non-urgent deliveries will get a $1.50 per package surcharge for FedEx Ground® Economy, which is a contract-only service. From November 29 through December 12 (accounting for BFCM shipping), that charge will jump to $3 per package. It then drops back to $1.50 per package through January 16, 2022.
Enterprise customers who meet a certain volume threshold will be charged a peak surcharge for FedEx Express and Ground packages traveling to residential addresses from Nov. 1, 2021–Jan.16, 2022. To qualify, you must ship a weekly average of more than 25,000 residential and FedEx Ground® Economy packages within certain timeframes. For more specifics, see here.
Large package charges apply from October 4 through January 16, 2022, and break down like this:
Questions? Reach out to your FedEx account manager for account-specific information.
The U.S. Postal Service’s peak rates this year are in effect from October 3 through December 26, 2021 and depend on service level.
Here are the surcharges for Priority Mail, Priority Mail Express, Parcel Select Ground, and USPS Retail Ground:
These services also have surcharges during this year’s peak:
The USPS temporary price increases are also part of its Delivering for America 10-year plan to reverse its projected $160 billion in losses over the next 10 years. A crucial part of that plan is reducing its burden from higher holiday shipping volumes.
For more information, check out the USPS press page.
With retailers already feeling the pressure of labor shortages and supply chain-related costs, these shipping surcharges highlight the need for accurate forecasting and planning. And if your customers are clustered in geographical areas where localized carriers can take some of the load, it may make sense to consider adding regional carriers to your mix.
As a senior content manager at Narvar, Michelle has a finger on the pulse of the ecommerce industry. She's spent close to a decade helping online retailers make sense of their post-purchase processes.