In preparation of another Shipathon, USPS joins UPS in announcing proposed peak season price increases

August 13, 2021


The United States Postal Service (USPS) is the latest to announce proposed peak season price increases. Pending favorable review by the Postal Regulatory Commission (PRC), the temporary rates would go into on Oct. 3 and remain in place Dec. 26.

According to the press release, the temporary pricing will impact commercial and retail domestic competitive parcels – Priority Mail Express (PME), Priority Mail (PM), First-Class Package Service (FCPS), Parcel Select, USPS Retail Ground, and Parcel Return Service. International products would be unaffected.

“These temporary rates will keep the Postal Service competitive while providing the agency with the revenue to cover extra costs in anticipation of peak-season volume surges similar to levels experienced in 2020.”

The proposed increases are as follows.

Priority Mail, Priority Mail Express, Parcel Select Ground and USPS Retail Ground:

  • $0.75 increase for PM and PME Flat Rate Boxes and Envelopes.
  • $0.25 increase for Zones 1-4, 0-10 lbs.
  • $0.75 increase for Zones 5-9, 0-10 lbs.
  • $1.50 increase for Zones 1-4, 11-20 lbs.
  • $3.00 increase for Zones 5-9, 11-20 lbs.
  • $2.50 increase for Zones 1-4, 21-70 lbs.
  • $5.00 increase for Zones 5-9, 21-70 lbs.

USPS

UPS Peak Season Surcharges

In an unprecedented move, UPS announced its peak season surcharges in June. Effective Oct. 3, the following peak surcharges will last until Jan 15, 2022:

  • Additional Handling will increase from $3.50 per package to $6.00 per package
  • Large Package will increase from $40.00 per package to $60.00 per package
  • Over Maximum limits will be $250.00 per package

A $0.30 per package peak surcharge for Residential and Surepost packages will remain in place until Oct 30.

On Oct 31, peak surcharges for Residential and Surepost will go into effect for qualifying customers who have shipped more than 25,000 packages during any week following February 2020. Details on the charges are available here.

Other Peak Season Surcharges

FedEx raised its peak surcharges on June 21 “until further notice”. We’ll likely see an announcement relating to peak season holiday surcharges from FedEx in the coming weeks. But until then, current peak surcharges from FedEx are:

  • Additional Handling increased from $3.00 per package to $3.50 per package
  • Economy Package Services (former SmartPost) increased from $0.75 per package to $1.00 per package
  • Residential increased from $0.30 per package to $0.60 per package

Expect other providers and carriers to implement holiday peak surcharges. Last year, for example, Pitney Bowes announced a” temporary peak rate adjustment not to exceed $1.50 per parcel across all of our ecommerce delivery and returns services.”

The Outlook

FedEx and UPS are expecting another strong holiday peak season. On its earnings call in June, FedEx described it as another “Shipathon”.  Indeed, a number of carriers and providers are either already maxed out of capacity for the holiday season or have cut off times to accept new customers until 2022.

Strong parcel volumes are persisting thanks primarily to the growth of e-commerce. According to the US Census Bureau, e-commerce retail sales grew 39.1% during the first quarter compared to the same period in 2020. Market research firm, eMarketer, revised its 2021 e-commerce forecast from 13.7% to 17.9% year-over-year growth due to stronger first quarter e-commerce spend.


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts has united with Transportation Insight to become North America’s #1 provider of small parcel management and optimization services.  Our team of best-in-class analysts employs cost modeling techniques to help clients optimize their supply chain spend, reducing costs by 20% or more.  Our approach is non-invasive to daily supply chain operations as we employ unparalleled market intelligence and proprietary cost modeling technology, targeting hidden costs and identifying savings opportunities. After establishing the success criteria, SME leverages proven project plans, data warehousing, and milestone documents to ensure an optimized and implementable solution. We build strong business cases based on your data to negotiate better terms, pricing, and service for our clients. We deliver your competitive edge.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

 

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In preparation of another Shipathon, USPS joins UPS in announcing proposed peak season price increases

August 13, 2021


The United States Postal Service (USPS) is the latest to announce proposed peak season price increases. Pending favorable review by the Postal Regulatory Commission (PRC), the temporary rates would go into on Oct. 3 and remain in place Dec. 26. According to the press release, the temporary pricing will impact commercial and retail domestic competitive parcels – Priority Mail Express (PME), Priority Mail (PM), First-Class Package Service (FCPS), Parcel Select, USPS Retail Ground, and Parcel Return Service. International products would be unaffected.

“These temporary rates will keep the Postal Service competitive while providing the agency with the revenue to cover extra costs in anticipation of peak-season volume surges similar to levels experienced in 2020.”

The proposed increases are as follows.

Priority Mail, Priority Mail Express, Parcel Select Ground and USPS Retail Ground:
  • $0.75 increase for PM and PME Flat Rate Boxes and Envelopes.
  • $0.25 increase for Zones 1-4, 0-10 lbs.
  • $0.75 increase for Zones 5-9, 0-10 lbs.
  • $1.50 increase for Zones 1-4, 11-20 lbs.
  • $3.00 increase for Zones 5-9, 11-20 lbs.
  • $2.50 increase for Zones 1-4, 21-70 lbs.
  • $5.00 increase for Zones 5-9, 21-70 lbs.
USPS

UPS Peak Season Surcharges

In an unprecedented move, UPS announced its peak season surcharges in June. Effective Oct. 3, the following peak surcharges will last until Jan 15, 2022:
  • Additional Handling will increase from $3.50 per package to $6.00 per package
  • Large Package will increase from $40.00 per package to $60.00 per package
  • Over Maximum limits will be $250.00 per package
A $0.30 per package peak surcharge for Residential and Surepost packages will remain in place until Oct 30. On Oct 31, peak surcharges for Residential and Surepost will go into effect for qualifying customers who have shipped more than 25,000 packages during any week following February 2020. Details on the charges are available here.

Other Peak Season Surcharges

FedEx raised its peak surcharges on June 21 “until further notice”. We’ll likely see an announcement relating to peak season holiday surcharges from FedEx in the coming weeks. But until then, current peak surcharges from FedEx are:
  • Additional Handling increased from $3.00 per package to $3.50 per package
  • Economy Package Services (former SmartPost) increased from $0.75 per package to $1.00 per package
  • Residential increased from $0.30 per package to $0.60 per package
Expect other providers and carriers to implement holiday peak surcharges. Last year, for example, Pitney Bowes announced a” temporary peak rate adjustment not to exceed $1.50 per parcel across all of our ecommerce delivery and returns services.”

The Outlook

FedEx and UPS are expecting another strong holiday peak season. On its earnings call in June, FedEx described it as another “Shipathon”.  Indeed, a number of carriers and providers are either already maxed out of capacity for the holiday season or have cut off times to accept new customers until 2022. Strong parcel volumes are persisting thanks primarily to the growth of e-commerce. According to the US Census Bureau, e-commerce retail sales grew 39.1% during the first quarter compared to the same period in 2020. Market research firm, eMarketer, revised its 2021 e-commerce forecast from 13.7% to 17.9% year-over-year growth due to stronger first quarter e-commerce spend.

ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts has united with Transportation Insight to become North America’s #1 provider of small parcel management and optimization services.  Our team of best-in-class analysts employs cost modeling techniques to help clients optimize their supply chain spend, reducing costs by 20% or more.  Our approach is non-invasive to daily supply chain operations as we employ unparalleled market intelligence and proprietary cost modeling technology, targeting hidden costs and identifying savings opportunities. After establishing the success criteria, SME leverages proven project plans, data warehousing, and milestone documents to ensure an optimized and implementable solution. We build strong business cases based on your data to negotiate better terms, pricing, and service for our clients. We deliver your competitive edge. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.  

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