There is a nip in the air. Excitement is building towards the upcoming holiday season. Competitive e-commerce retailers are offering the best Black Friday sale pitches. Shippers are offering early deals to customers to offset parcel delivery costs. This is because shipping expenses increase during the holiday season.
Moreover, shipping carriers like UPS and FedEx announced their Peak season surcharges for 2024 in July. These surcharges add to shipping costs, so companies must plan for them.
FedEx GRI and surcharges were a part of our earlier article. This article will examine the UPS surcharges in 2024 in the Peak Season. In addition, we will discuss the Peak Season Surcharge and ways to lower shipping costs.
Initially, let’s understand what the Peak season surcharges are.
Peak Season surcharges
The year-end holiday season in the U.S. is the Peak Season. The excess fees carriers charge shippers during this period are Peak or Holiday season surcharges. This year, the holiday season is shorter, consisting of only 17 operating days. It will put more pressure on the shippers and shipping carriers to deliver parcels on time. So, many shipping carriers charge extra fees for operational challenges like hiring more labor, fleet expansion, etc.
FedEx and UPS have released their General Rate Increase (GRI) for 2025. The rate increase has impacted the shipping costs for many companies. Further, UPS and FedEx have announced their Peak Season 2024 year-end holiday schedule and rates. The shipping rates depend on delivery locations, shipping volumes, and more. UPS mentions the Peak season fees as Demand Surcharges.
UPS surcharges in the Peak season
According to the UPS year-end holiday schedule, some packages will be delivered after the holiday for select services, like UPS Next Day Air®. The details of the UPS holiday schedule are available on their site.
The surcharges in focus in the Peak season are
- Additional Handling surcharges include special handling of packages determined by UPS. For instance, the packages weigh more than 50 pounds. Further, these charges are calculated based on length, width, length plus girth, and packaging.
- The Large Package surcharges are for packages whose length and girth are more than 130 inches.
- The Over Maximum Limits surcharge applies to packages that weigh more than 150 pounds and more than 108 inches lengthwise or 165 inches length plus girth combined.
Detailed information about UPS surcharges applicable from October 20, 2024, is available on the UPS website.
UPS is levying extra fees on Additional Handling and Large packages for all U.S. domestic, export, and import shipments. This demand surcharge is only for businesses that have been,
- in any week after February 2020
- invoiced for more than 1,000 total packages, or
- invoiced for more than ten combined Large Packages or packages requiring Additional Handling
or,
- after December 31, 2020, set up a new UPS account.
Moreover, all packages with Over Maximum Limits will be charged more.
The UPS Demand Surcharge was $ 3.50 per package for Additional Handling and $40 for Large Package surcharge before September 29, 2024. The Additional Handling surcharges increase from September 29, 2024, to January 18, 2025. They range from $7.75 to $9.95 per package. Further, the Large Package surcharge varies from $84.75 to $99.00 per package from September 29, 2024 to January 18, 2025. On the other hand, Over Maximum Limits charges are from $445 to $495 per package in the same period.
UPS surcharges for services
UPS has varying fees for service levels like SurePost, Ground Residential, and Air. The Demand surcharges vary from $0.25 to $2.00 per package. This surcharge will apply from October 27, 2024 to January 18, 2025. UPS will charge a demand surcharge for businesses invoiced any week after October 2023 for more than 20,000 packages. Only some UPS Air Residential, UPS Ground Residential, and UPS SurePost packages will be affected by these additional fees.
Further, weekly UPS Demand surcharges are levied for some services. These services include UPS SurePost®, UPS Ground Residential, Next Day Air Residential, and All Other UPS Air Residential. This fee is calculated for each package based on the percentage of Baseline volume from October 27, 2024, until January 18, 2025. Baseline volume is a customer’s average weekly volume for certain UPS services. For more information on this UPS Demand surcharge- read the details on the UPS Demand Surcharge page.
Chief Changes in the UPS Demand Surcharges of 2024
UPS Demand surcharges for 2024 are steeper than in previous years. UPS has applied different rates rather than a single rate throughout the holiday season. In addition, some UPS Demand surcharges start in September compared to previous October start dates. UPS Peak season has exorbitant charges from November 24 to December 28, 2024. The surcharge amount is the maximum for each package during this period.
What are the strategies to adopt in Peak season 2024
Shippers are planning ahead to balance the shipping revenue for the holiday season. Businesses are adopting different strategies to tackle the hike in UPS Demand Surcharges. These strategies include
- negotiating discounts with shipping carriers to avoid paying the extra fees
- encouraging customers to bunch up orders to decrease shipping costs
- using alternate regional carriers that offer low-cost delivery services
- giving incentives to shoppers to shop early so that shipments are spread across the Peak season
These strategies in the Peak season also depend on the businesses’ shipping volume, package weights, etc. Further, shippers can invest in advanced technologies that can anticipate the surcharges.
Software that predicts shipping patterns and automates shipping processes reduces shipping costs. Businesses can efficiently manage their shipping costs by getting the best services from UPS. Alternatively, partnering with parcel audit firms helps shippers gain from the Peak season surcharges.
How Audintel helps to mitigate Peak season surcharges
The Peak season surcharges levied by shipping carriers are confusing. We simplify the charges for shippers so that they can plan shipping strategies. Audintel provides auditing solutions offering businesses insights into their shipping profile. Shipping data is the key for shippers to find ways to reduce shipping costs. Audintel’s Transportation Spend Management (TSM) solutions give an overview of the optimum services for businesses.
In addition, Audintel’s AI-powered platform compares and analyses multiple carrier contracts. We monitor the performance of shipping carrier services for any discrepancies. Our technology-driven solutions uncover hidden costs in carrier contracts so that shippers negotiate better. Our TSM solutions aids in calculating shipping costs during the Peak season.
Audintel’s experts dive into the intracacies of UPS Peak season surcharges and advise businesses. We give negotiation tips to our clients so that they can ask for discounts during the holiday season. In this way, our team has helped many shippers save money and gain profits during the Peak season.
Wrapping it up
Companies are gearing up for the short holiday season. It is the time of the year to bring in extra revenue. Businesses have learned how to mitigate shipping expenses using intelligent software. But, naïve businesses may get hit with the unexpected, steep charges levied by UPS. Shippers with investments in state-of-the-art auditing technologies will not be affected much. Shipping data from auditing invoices will help businesses negotiate with shipping carriers for discounts. In addition, insightful strategies will help shippers reduce shipping costs during the holidays.
Companies benefit immensely from parcel audit experts like Audintel. Our next-generation technological services and tools efficiently find ways to decrease shipping costs. Shippers make informed decisions based on the shipping data at their fingertips. Businesses can enhance their profits with Audintel’s auditing solutions. Contact us at +1 (619) 354 8539 to learn more about the impact of increasing expenses due to UPS Demand surcharges. To know how to lower rising shipping costs, visit our Audintel website.