Peak...er, DEMAND Surcharges 2023 - Who's In? Who's Out?
In a surprising turn of events, two major carriers dropped some, if not all, of their peak surcharges. Find out who’s cutting surcharges, who’s increasing them, and how you can benefit from the competition between carriers this holiday season.
USPS – Out
In the past, the United States Postal Service weathered the holiday season with the help of tens of thousands of temporary workers. However, since January 2021, USPS has moved 150,000 pre-career employees into career positions. With a consistent employee roster, USPS plans to hire only 10,000 seasonal employees nationwide instead of the 51,000 engaged in 2021.
This strategy is a win-win for the carrier and clients. USPS Executive Vice President and Chief Commerce and Business Solutions Officer Jakki Krage Strako said, “If we’re not going to incur a hyper-expense, like we have in past seasons, we had the opportunity to make sure that we were not charging the demand fees, as our competitors call it.”
Amazon – One foot in. One foot out.
Last year, Amazon introduced peak surcharges, following in the footsteps of UPS and FedEx. This year, it’s doing things a little differently. While Amazon plans to keep its Holiday Peak Fulfillment Fee for its Fulfillment by Amazon service, it will not impose a surcharge on its shipping ground service. During the peak season, third-party sellers can expect charges between $0.20 and $2.50 per package, which will cover “increased fulfilment and transport operating costs during the busy holiday shopping season.”
FedEx – In
In FedEx’s Q1 2024 Earnings Call, FedEx doubled down on its holiday pricing strategy, with Executive Vice President and Chief Customer Officer Brie Carere stating, “from a pricing strategy perspective, we’re committed to our strategy, which does include peak surcharges.”
The good news for most FedEx customers? They won’t be affected. Carere explains, “The vast majority of our customers actually do not pay a peak surcharge because their volume just doesn’t flex up enough to qualify for the peak surcharge.” However, customers at the enterprise level who ship more than 20,000 total FedEx Express and FedEx Ground U.S. domestic packages in a calculation week could pay between $1.35 and $7.40 per package in demand surcharges.
UPS- In
In a move similar to FedEx, UPS levies the highest surcharges of all. Customers who shipped over 20,000 packages any week after October 2022 could see additional fees between $1.35 and $7.50 per package. This move is just one way the carrier is raising its bottom line after agreeing to increase employee pay rates.
Pay less on shipping this holiday season with ShipRx’s parcel rate negotiation service. Our team has over three decades of experience in this industry, and we know how to secure the most significant savings for our clients. Get in touch today to set up a free savings analysis and find out how you can join the happy customers who save, on average, 20-30% after a parcel audit with ShipRx.
UPS reports a 5th consecutive quarterly decline
It’s no secret that the parcel industry has experienced some major shakeups over the past few years. From scrambling to meet a COVID-era spike in e-commerce to dealing with reduced demand due today, the carriers haven’t had it easy.
Amazon Surpasses UPS in Parcel Volume
The company that began as an online bookseller in Jeff Bezos’ Bellevue, Washington home is now one of the leading parcel carriers globally. For the first time ever, in 2023, Amazon Logistics surpassed UPS in parcel volume to secure
The End of Free Shipping?
Last week, we discussed UPS and FedEx’s new surcharges in 82 urban zip codes. Now, some are saying these surcharges, ranging from $3.95 to $5.85, might be the final straw for free shipping.
Save On Your Parcel Costs Today
Get a full-scale analysis of your business and ShipRX exclusive recommended solutions to increase your profits.
