- 20 November 2019
- Transport / Logistics Services
US businesses sending heavy parcels through UPS and FedEx in 2020 are to face big surcharges. Packages of between 50-70lbs are to be hit with up to 24% added fees for each unit. The surcharges are set to begin as soon as their new price rises kick in, on 29 December and 6 January respectively.
Industry observers say that UPS currently has a $44.43 base rate on a 50lb ground commercial parcel moving between 1,000 and 1,400 miles and has five-day transit times. UPS also assesses a $3.22 fuel surcharge, bringing the total to $47.65. Come 2020, that same shipment will be assessed a $24 handling surcharge on top of a $46.75 base rate and a $5.12 fuel surcharge. This will bring the total charge to $75.69, a 58.8% year-on-year increase. Applying the same set of numbers to FedEx will yield a 58.6% increase.
Parcels of 50lbs and up typically have irregular dimensions and require special handling, adding to the cost of delivery.
Steve Gaut, a UPS spokesman, said, “We are charging customers for the value we provide.”
Jonathan Lyons, a FedEx spokesman, said the surcharge is needed to offset the higher costs resulting from a “surge in oversized and heavy items” that are ordered online. Changes to the company’s operations are necessary to “ensure that we continue to provide the level of service that our customers expect while responsibly managing capacity through our network,” Lyons said.
That said, this shouldn’t impact the market as a whole too hard as the bulk of parcels sit at the 4lb-7lb range.