More Rate Changes by UPS as Peak Season Approaches

 In Industry News

As the small parcel shipping industry moves towards its busiest time of year, UPS continues to add new — and make adjustments to — several surcharges and fees. To everyone’s frustration, these types of adjustment have become common throughout the year, making it increasingly difficult for shippers to budget.

In summary:

The announced Fuel Surcharge increase is pretty straightforward. Both Ground and Domestic Air Fuel Surcharges are increasing by 0.25% across all thresholds. This change is relatively minimal, but after the recent FedEx announcement which created parity, UPS is now slightly more expensive on fuel again.

More complicated is that the Shipping Charge Correction (SCC) Audit Fee (which was implemented by UPS only a few months ago, on June 4, 2018) is changing. The details of this charge are explained here in a previous post. It is currently assessed when a shipper’s average SCC is more than $5. Effective October 22, that average threshold is lowered 60% to $2. This makes it even more important for UPS shippers to manifest their packages correctly (dimension & weight) to avoid Shipping Charge Corrections and the Audit Fee. Our belief is that UPS realized it wasn’t getting the revenue it had hoped for from the original threshold, hence the lower amount.

Of note to shippers is that this does not necessarily create a competitive advantage for FedEx, because it is still reliant upon the shipper (not) entering correct dimensions. But it does create more hassle for shippers’ internal reconciliations.

From the UPS website:

These fees are in addition to the many Peak Season Surcharges that UPS has already announced. You can find more details via this link: https://www.ups.com/assets/resources/media/en_US/peak-surcharge.pdf

If you would like to know how these fees may impact your shipping costs, contact us for a free analysis. Visit our website – here.

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