UPS Parcel Rates and Surcharges for 2020 are Announced – Effective Dec 29, 2019

November 21, 2019


UPS’ parcel rates for 2020 are published and overall, there are not many surprises. Once again, UPS announced that its rates for its Ground, UPS Air and International services will increase an average net 4.9% effective Dec. 29.

But perhaps the big surprise is the introduction of a few new surcharges:

1. A processing fee of $150.00 will apply to each request to file a single entry under Entry Type 86 for a shipment that normally qualifies for U.S. customs clearance under a consolidated manifest.
2. Prohibited Item fee of $150.00 will apply to packages containing prohibited articles or restricted articles not in compliance with all UPS policies and procedures and applicable laws and regulations if found in the UPS system.
3. A rebill fee of $17.00 per shipment will be assessed for each request to change the billing account for a shipment.

Large packages and the last mile distance are among the targets for fee adjustments.

For example, following FedEx’s 2020 rate and fees announcement, UPS followed suit and lowered its weight threshold for applying an Additional Handling surcharge. Similar to FedEx, the weight will be lowered from 70 pounds to 50 pounds actual weight for UPS Ground and UPS Air services. The Additional Handling fee for weight will increase from $23.00 in 2019 to $24.00 in 2020 and will apply to more packages thanks to the lowered weight threshold.

UPS’ Large Package fee for commercial will increase from $95.00 to $100.00 and from $115.00 to $120.00 for residential. In addition, Over Maximum will increase from $850.00 to $875.00.

As for last mile distance, delivery area surcharges (DAS) have steadily increased over the years and this year is no exception for either FedEx or UPS. The biggest year-over-year increase is UPS’ Ground DAS Commercial Extended at 18.8% from $2.80 to $3.45 followed by DAS Residential Extended, increasing 10.19% from $4.85 to $5.40. These extended destinations are often described as ‘very rural’ and defined as ‘extended distance’. These routes tend to be either low or perhaps unprofitable routes and as such in the past few months we have seen FedEx and UPS partnering with retailers such as Dollar General, Walgreens, Michaels and CVS for pickup and delivery to help minimize these costs.

There are certainly more increases from UPS including Address Correction which will increase from $16.40 per package to $17.00 as well as Adult Signature Required increasing from $6.00 to $6.35.

Anything that could potentially slowdown a delivery such as an adult signature or C.O.D. along with extended distance routes and large packages seem to be the target of the bigger increases. The race to deliver packages the quickest continues as Amazon takes on more of its own ground deliveries and their promise to Prime members to deliver next day resonates across the entire market.

For more information on how UPS parcel rates or FedEx 2020 rates could impact your business, contact us at solutions@spendmgmt.com. In addition, stay tuned for an upcoming Supply Chain Now Podcast featuring our CEO, John Haber, in which John discusses the UPS 2020 rates in more detail.


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

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

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UPS Parcel Rates and Surcharges for 2020 are Announced – Effective Dec 29, 2019

November 21, 2019


UPS’ parcel rates for 2020 are published and overall, there are not many surprises. Once again, UPS announced that its rates for its Ground, UPS Air and International services will increase an average net 4.9% effective Dec. 29. But perhaps the big surprise is the introduction of a few new surcharges: 1. A processing fee of $150.00 will apply to each request to file a single entry under Entry Type 86 for a shipment that normally qualifies for U.S. customs clearance under a consolidated manifest. 2. Prohibited Item fee of $150.00 will apply to packages containing prohibited articles or restricted articles not in compliance with all UPS policies and procedures and applicable laws and regulations if found in the UPS system. 3. A rebill fee of $17.00 per shipment will be assessed for each request to change the billing account for a shipment. Large packages and the last mile distance are among the targets for fee adjustments. For example, following FedEx’s 2020 rate and fees announcement, UPS followed suit and lowered its weight threshold for applying an Additional Handling surcharge. Similar to FedEx, the weight will be lowered from 70 pounds to 50 pounds actual weight for UPS Ground and UPS Air services. The Additional Handling fee for weight will increase from $23.00 in 2019 to $24.00 in 2020 and will apply to more packages thanks to the lowered weight threshold. UPS’ Large Package fee for commercial will increase from $95.00 to $100.00 and from $115.00 to $120.00 for residential. In addition, Over Maximum will increase from $850.00 to $875.00. As for last mile distance, delivery area surcharges (DAS) have steadily increased over the years and this year is no exception for either FedEx or UPS. The biggest year-over-year increase is UPS’ Ground DAS Commercial Extended at 18.8% from $2.80 to $3.45 followed by DAS Residential Extended, increasing 10.19% from $4.85 to $5.40. These extended destinations are often described as ‘very rural’ and defined as ‘extended distance’. These routes tend to be either low or perhaps unprofitable routes and as such in the past few months we have seen FedEx and UPS partnering with retailers such as Dollar General, Walgreens, Michaels and CVS for pickup and delivery to help minimize these costs. There are certainly more increases from UPS including Address Correction which will increase from $16.40 per package to $17.00 as well as Adult Signature Required increasing from $6.00 to $6.35. Anything that could potentially slowdown a delivery such as an adult signature or C.O.D. along with extended distance routes and large packages seem to be the target of the bigger increases. The race to deliver packages the quickest continues as Amazon takes on more of its own ground deliveries and their promise to Prime members to deliver next day resonates across the entire market. For more information on how UPS parcel rates or FedEx 2020 rates could impact your business, contact us at solutions@spendmgmt.com. In addition, stay tuned for an upcoming Supply Chain Now Podcast featuring our CEO, John Haber, in which John discusses the UPS 2020 rates in more detail.


ABOUT SPEND MANAGEMENT EXPERTS Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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