E-commerce orders increase in the holiday season due to high demand from customers. Ideally, the peak season for shipping is the holiday season beginning in early November each year. However, UPS has decided to continue its Peak or Demand Surcharges on packages “till further notice” in 2022. The increase in surcharges may be due to rising inflation and gas prices.
However, UPS has not cited a particular reason for the rise but mentioned increased demand for shipping services on its website. This article explores the UPS Peak or Demand surcharges with new changes in 2022. In addition, we will discuss how UPS surcharges affect businesses.
What is UPS Peak Surcharge?
The holiday season in the United States typically starts in early November and ends in January. Many customers do their holiday shopping late, resulting in high demand for shipping packages at the last minute. Shipping carriers consider the holiday season as the peak season. They charge extra fees along with the base cost of shipping. UPS names these surcharges as UPS Peak or Demand surcharges. So, UPS charges more for the additional handling of packages and oversize packages. Further, UPS levies a delivery surcharge for international or remote area shipments.
UPS Peak Surcharges-what’s new in 2022
Since 2020, UPS has had peak or demand surcharge fees throughout the year rather than just during the traditional holiday season. But, from May 2022, the peak surcharges have risen sharply for shipments from and to the United States. The calculation of the shipping rates is per pound based on the billable weight of the shipment. The surcharges are subject to dynamic changes. As of September 9, 2022, update on the UPS website, we have observed the following surcharge fluctuation. These surcharges are:
- Set at $3.50 per package for additional handling and $40 per package for Large parcels. This fees will apply till October 1, 2022. Further, expenses are increasing to $6.50 per package for additional handling, $70 per package for Large parcels, and $400 per package for Over Maximum Limit packages after October 2, 2022, until January 14, 2023.
- Set at thirty cents per package for domestic UPS Ground Residential and UPS SurePost packages (valid till October 29, 2022). In addition, these peak surcharges is applicable to shippers who have shipped more than 25,000 packages in any week after February 2020. The fees are regardless of the shippers’ shipment volumes for any services.
From October 30, 2022, to January 14, 2023, businesses can expect a significant UPS peak surcharge in the following services: UPS Sure Post, UPS Ground Residential, UPS Next Day Air Residential, and other UPS Air Residential. The fees are applied weekly to each package. It applies to packages exceeding 105% of a shipper’s average weekly volume (“Baseline” volume) within each service level. (Click here for more details).
UPS Peak Surcharges (applicable from January 16, 2022, till further notice) for UPS Standard shipments from Canada to the U.S. is $0.30 per package and UPS Trade Direct® shipments from the U.S. to Canada are $0.42 Canadian Dollars (CAD) per package.
UPS Peak or Demand Surcharges for various Worldwide services
UPS has levied UPS Peak or Demand surcharges for other services too. These services are for international shipments to and from the United States with different delivery times. There is an increase in fees from May 22, 2022, by UPS with no definite end date. The international services include:
UPS Worldwide Express and UPS Worldwide Express Plus: These services involve delivering packages to destinations worldwide in 2-5 days. Shippers get guaranteed on-time delivery of their packages with in-house customs clearance.
UPS Worldwide Saver: This service uses air transport and guarantees delivery by the end of a business day. Shippers choose UPS Worldwide Saver for fast deliveries and last-minute delivery of goods.
UPS Worldwide Expedited: Small and lightweight parcels are delivered internationally within 2-5 business days. It is a guaranteed service by UPS that sends packages to destinations worldwide at a lower shipping rate.
UPS Worldwide Express Freight: This service provides guaranteed, faster, palletized shipments in more shipping lanes. It is in use when shippers want to send products in an emergency. It takes 1-2 business days for package delivery. In 2022, UPS peak surcharges are increased two-fold for shipments using this service based on the weight of the shipment.
UPS SurePost: It is an economical service of UPS, wherein the last-mile delivery is by the U.S. Postal service (USPS). Shippers use this service for non-urgent, business-to-customer needs of low value. It is ideal for packages less than 10 lbs.
Note: please see the details on the UPS official U.S. website for the precise calculation of UPS peak surcharges.
Suggestions to minimise UPS Peak Surcharges
Shippers can follow some parameters like keeping the weight of packages less than 70 lbs to cut down on shipping expenses. In addition, companies can maintain the dimensions of parcels to acceptable levels. Further, using the United States Postal Service (USPS) helps to reduce peak prices and get assurance of pick of packages. On the other hand, shippers can minimise UPS Peak Surcharges with cost-saving advice from partners such as Audintel. We help shippers get discounted shipping rates and negotiate surcharges with shipping carriers. Our team analyses shippers’ data and provides insights into saving money for businesses. UPS Peak or Demand surcharges are dealt with by the team of Audintel effectively.
Rising shipping costs due to surcharges levied by shipping carriers are changing the way you ship today. Keeping track of Peak surcharges, shipping rates of shipping carriers and on-time delivery of packages seems overwhelming for shippers. Audintel helps companies understand the complexity of the shipping carriers’ fees and surcharges. We simplify the shipping process for your company. If you have questions regarding our services, contact us on 408-675-2750 or visit our Audintel website.