UPS is keeping its customers on their toes with a barrage of charge and fee changes.
With effect from Sunday, all shipments on UPS from mainland China, Hong Kong and Macau to the US will be subject to a ‘surge fee’ of $0.29 per pound, based on the shipment’s billable weight, and will be in place through 29 March.
“Our goal is to ensure we can continue to meet our customers’ shipping needs without compromising the quality or timeliness of service expected from us,” the integrator explained to customers.
The ‘surge fee’ comes a week after a surcharge adjustment on Monday, by 50 basis points, for the integrator’s ground, air and SurePost services in the US.
This increase sounds modest, but it nudges overall shipping costs higher. According to the TD Cowen/AFS Freight Index, the fuel surcharge hikes of FedEx and UPS raised the average net fuel cost for ground parcel shipments by 4.7% from the third quarter of last year to the fourth.
UPS announced the fuel surcharge adjustment on 6 March, in conjunction with changes in administrative fees that will come into play at the end of this month. For the most part, shippers can avoid or mitigate the impact of these, though.
Its levy on late payments is going up, from 8% so far to 9.9%, on 31 March and, at the same time, UPS will implement a $5 fee for each printed invoice copy sent to customers, as well as a $25 charge per payment made by cheque or wire transfer (except for automated clearing house wire payments).
Shippers can avoid these by paying invoices on time, automating payment processes, and switching to digital invoicing.
Meanwhile, the next change to payment processing fees is looming on 18 May, when UPS will stop levying a 2% surcharge on invoice payments made by credit card. In its place it will charge a 2% processing fee for each invoice.
All these changes come on top of the general rate increase of 5.9% that both FedEx and UPS applied at the start of the year – although increased competition and less-than-vigorous demand have forced the pair to discount rates to attract or retain shippers, industry experts have noted.
“What UPS is doing is just another way of raising shipping charges to offset their costs,” commented Cathy Morrow Roberson, founder and head analyst of Logistics Trends & Insights.
“Expect more ‘fee adjustments’ from them, and likewise FedEx,” she added.
The two large integrators have largely moved in lockstep with rate increases and surcharges, so other observers also anticipate a similar move by FedEx.
More adjustments are bound to come once US customs has figured out how to process and collect duties on ecommerce shipments that enter the US from China under the de minimis exemption, although most industry experts reckon this will take some time.
John Haber, chief strategy officer at Transportation Insight, commented that FedEx and UPS were ahead of most of the other players in terms of capturing and processing parcel shipment data, but they still faced some challenges that will have an impact on cost.
“It’s a problem for everybody,” he said.
Shippers will see charges for this in due time.
