FILE PHOTO: The company logo for United Parcel Service (UPS), is displayed on a screen at the New York Stock Exchange (NYSE) in New York, U.S., October 22, 2019. REUTERS/Brendan McDermid
August 7, 2020
(Reuters) – United Parcel Service Inc plans to impose hefty fees on large shippers sending significantly more packages through its system during the holiday season amid the coronavirus pandemic, the Wall Street Journal reported on Friday.
The novel coronavirus outbreak has disrupted operations at UPS and other large delivery firms – accelerating shipments of everything from face masks and medical equipment to food and furniture, while putting the brakes on profit-making shipments between businesses.
UPS said the fees could total as much as $3 a package for ground shipments and other lower-priced shipping options and up to $4 a package for air shipments bound for residences, according to the report. (https://on.wsj.com/3ksloN0)
The rates escalate as shippers post 110%, 200% and 300% more shipments than their February volumes.
“This could be the last we see of free shipping,” said Cathy Morrow Roberson, founder of Logistics Trends & Insights.
UPS said its surcharges will apply from mid-November until mid-January and are designed to apply only to customers who ship more than 25,000 packages a week, with the fees rising based on how much higher the weekly shipping volume is compared to the customer’s average weekly shipping volume in February, the WSJ reported.
UPS did not immediately say what percentage of their customers would be affected.
Amazon.com is the largest customer of UPS and it was not immediately clear if the charges will apply to the world’s biggest retailer.
In an internal document circulated before the surcharges were disclosed, UPS told its sales team that the fees would help to counter higher costs to hire new workers and to secure additional air, truck and rail capacity, the WSJ report said.
(Reporting by Arunima Kumar in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Shailesh Kuber)