eCommerce

UPS Gearing Up To Increase The Rates It Charges

UPS is gearing up to raise the rates it charges by 4.9 percent, on average. According to a press release issued last week, the increases on UPS Ground service in the U.S. and UPS Air and International delivery will kick in on Dec. 26. Additional rate changes and charges, such as new retail rates and UPS SurePost rates, will be announced on Nov. 18. SurePost is UPS’ program in which the courier gives parcels to the U.S. Postal Service to deliver to customers.

“This [rate increase] supports the ongoing investments we continue to make in the speed, scope and coverage of our transportation network,” UPS said in a statement announcing the rate hike. “While we continuously search out opportunities for new efficiencies and implement them within our network, those efforts do not fully offset cost increases.”

UPS also lowered the package size in which charges kick in. The company said it will charge more for 48 inches or more, down from 60 inches for international shipping. Other rates for 2017 include a $0.35 increase in the additional handling fee, which currently stands at $11.

UPS rate changes come as the delivery company mulls expanding into Saturday home delivery in a handful of markets in the U.S. The goal is seeing if the costs of picking up an extra day would be balanced by the revenues generated by adding the extra day. This is one of a variety of moves the delivery service is contemplating as it moves to adapt to rising eCommerce and the attendant flexibility requirements (same-day delivery, for example).

UPS is currently a beneficiary of Amazon’s (and others’) exploding shipping businesses, but it is pretty clear, given the level and volume of infrastructure upgrades Amazon has spent the year making to its shipping mechanisms, that the eCommerce giant will independently secure its logistic needs through any and all means necessary. Those means include FedEx, the USPS and its own independently operating delivery fleet — whatever it takes to make sure the package gets to the customers’ hands in the specified time scope.

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