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Parcel Carrier Surcharges Ahead of the 2021 Holiday Season

by EasyPost

person retrieving package from trunk As carriers are still grappling with pandemic-related shipping delays, many eCommerce companies are worried about this year’s shipping services ahead of the holiday season. Major players in the shipping industry are already issuing surcharges that have a huge impact on companies worldwide.

For example, UPS recently announced updates to their peak surcharges based on a tiered-volume system, leaving their eCommerce shipping partners with no choice but to either pay the raised fees or find alternatives for their postal service needs.

Other shipping giants such as FedEx and USPS are also running into network constraints, making it that much more difficult for timely package delivery this holiday season. The constraints are resulting in higher shipping costs across the board, with companies expecting a 25-30 percent uptick in shipping costs on top of $100 million spent on transportation costs.

When Do New Shipping Surcharges Begin?

Specifics depend on the carrier. For example, UPS’ increased rates will begin on Oct. 31 and extend through Jan. 15, 2022. These increases are specifically for shippers that push out more than 25,000 packages to UPS at any point since February 2020. Specifically, pricing changes are based on the package volume increase from 110 percent capacity to over 500 percent capacity.

UPS Ground & UPS SurePost

Shipping carriers such as UPS Ground and UPS SurePost are also increasing their prices starting at $1.15 per package for shippers who hit 110 percent-200 percent of their February volume. If shippers hit 500 percent of their February volume, packages will be increased by $5.15 per package.

UPS Air Residential Deliveries

Standard rates for UPS air residential deliveries are $2.15 per package for 2020 February volumes between 110 percent and 200 percent. The highest tier of 500 percent volume increases to $6.15 per package.

Oversized packages or packages that may require special handling are no exception to these increases.

  • Large packages jump from $31.45 per package to $40 per package from July 4 to Oct. 2, then increase to $60 per package from Oct. 3 to Jan. 15.
  • Packages that require special handling will see increases as of July 4th and extend to Oct. 2, jumping from $3 per package to $3.50 per package.
    • Starting Oct. 3, these packages will then increase to $6 per package, doubling their current rate.

The goal with these increased rates is to discourage large items out of the shipping network to reduce clogs.

FedEx Updates

FedEx is placing a $30 per-package charge on oversized packages this year, an update that has been in place since Jan. 18 of last year. Residential delivery charges have gone from 30 cents per package to 60 cents per package for shippers who average over 30,000 packages via FedEx Express and FedEx Ground from Jan. 4-Jan. 31, 2020.

Handling surcharges are also increasing from $3 per package to $3.50 per package, an impact that impacts domestic Express, Ground, and International Ground shipments.

USPS Updates

On Aug. 29, USPS is making a Market Dominant price change that impacts First-Class mail, First-Class International mail, Media/Library mail, and other special services. These changes are pending PRC approval and are expected to be resolved on July 19 of this year.

What this Means for Regional Carriers

Due to the surcharges across the board, this means that regional carriers will take on additional shipping volumes. Be mindful that UPS is starting their fall surcharges 2 weeks earlier than they did in 2020, likely having to do with the fact that volumes will be higher than normal this year.

EasyPost Will Keep You Updated

As your business grows and you need to make improvements to your shipping process, consider how our modern shipping API can play a role in your business’ logistical operations and become your true eCommerce shipping partner. From generating shipping labels in real-time to increasing your shipping reliability, EasyPost is your go-to shipping solution.

We will continue to keep you updated with surcharge information as we inch closer to peak shipping season.