UPS and FedEx Continue Peak Season Surcharges into 2021

December 23, 2020


Holiday peak season surcharges were scheduled to expire in January. However, FedEx and UPS have announced these charges that began in the Spring to "manage demand", will continue into 2021.

Managing demand has proven difficult for both small-parcel carriers as e-commerce sales continue to skyrocket and parcel volumes rise. FedEx and UPS have capped volumes for some customers while restricting the number of trailers for other customers. These practices will likely continue into 2021 as e-commerce sales, and thus, small parcel volumes, are expected to remain high.

While the two largest small-parcel carriers raise rates and increase surcharges to manage demand for their services, Amazon CEO of Amazon Worldwide Consumer, Jeff Wilke, wrote in an open letter to its sellers, “while many other companies have passed along costs through surcharges and fee changes in 2020, we have absorbed over $5 billion of those costs on your behalf,” in what seemed to be a challenge to FedEx and UPS.

2021 will likely be the year of alternative last-mile delivery solutions for shippers to ensure capacity for all of their shipments and at prices that are more agreeable. Small-parcel regional carriers, local couriers and crowd-sourced delivery providers such as Instacart and DoorDash will almost certainly be embraced by shippers, as well as Amazon Logistics.

Download below and check out our latest piece comparing the recent peak season surcharge announcements from UPS and FedEx.

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UPS and FedEx Continue Peak Season Surcharges into 2021

December 23, 2020


Holiday peak season surcharges were scheduled to expire in January. However, FedEx and UPS have announced these charges that began in the Spring to "manage demand", will continue into 2021. Managing demand has proven difficult for both small-parcel carriers as e-commerce sales continue to skyrocket and parcel volumes rise. FedEx and UPS have capped volumes for some customers while restricting the number of trailers for other customers. These practices will likely continue into 2021 as e-commerce sales, and thus, small parcel volumes, are expected to remain high. While the two largest small-parcel carriers raise rates and increase surcharges to manage demand for their services, Amazon CEO of Amazon Worldwide Consumer, Jeff Wilke, wrote in an open letter to its sellers, “while many other companies have passed along costs through surcharges and fee changes in 2020, we have absorbed over $5 billion of those costs on your behalf,” in what seemed to be a challenge to FedEx and UPS. 2021 will likely be the year of alternative last-mile delivery solutions for shippers to ensure capacity for all of their shipments and at prices that are more agreeable. Small-parcel regional carriers, local couriers and crowd-sourced delivery providers such as Instacart and DoorDash will almost certainly be embraced by shippers, as well as Amazon Logistics. Download below and check out our latest piece comparing the recent peak season surcharge announcements from UPS and FedEx.

Download PDF
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