Seeking to manage the overflow of cases during the pandemic, UPS is adding a new ‘peak’ surcharge similar to how they do for the busy holiday season, The Wall Street Journal reported Thursday (May 28).
The surcharges will add an extra 30 cents to packages shipped by UPS Ground and SurePost, which drops packages at local post offices for further home delivery. They will be leveled specifically at companies like Amazon, Target and Best Buy that have been inundating UPS with the most requests as people make orders more often online during the pandemic.
Another surcharge will add $31.45 for every large package shipped, which could entail things like desks or large chairs as many Americans have been adjusting to remote work and setting up offices, that could add up for some companies.
The deliveries to personal homes have been higher than usual as people have avoided going out and, for much of the past two months, many stores have been closed due to the pandemic.
UPS has been suffering financially as their main money-maker in the form of bulk shipments to businesses have been slashed due to most of those businesses scaling back operations during the pandemic.
Now, with the surcharge, affected companies will have to decide whether to raise prices, absorb the added cost or perhaps do both. Companies might also try to work around the new rules by closely weighing the amount and size of the packages they send through UPS.
The fees will likely impact larger businesses the most. Target, for example, saw online orders more than triple in April from its usual rates. Amazon, which saw a 26 percent surge in the March quarter year-over-year, is slowly returning to typical rates of shipping.
FedEx has also been hit by the same shipping woes, responding this week by limiting the number of packages some companies, including Bed Bath & Beyond, Nordstrom and Kohl’s, can send.