Each holiday season the major shipping carriers add surcharges to their shipping rates. It’s an additional fee on top of the base rate. Q4 is by far the busiest time of year for ecommerce fulfillment. Carriers capitalize on that with these additional fees to counterbalance the additional equipment, labor, and support they provide to deliver high volumes.
A Note on Delays
This holiday season might be very different from years past. With such a dramatic increase in ecommerce sales this year, plus a very different retail market landscape, it’s hard to forecast exactly what Q4 will be like. Many carriers are advising buyers and sellers to predict delays, longer delivery times, and more overload during peak season than usual.
Do all Services Incur Charges?
Each carrier sets their own increases, and those vary between freight types, domestic versus international, express and ground, and everything in between.
It’s not just during peak season that these surcharges occur. In April of 2020 FedEx and UPS both added fees due to the COVID-19 containment restrictions and limited cargo capacity. During the fall and winter, often carriers will implement the surcharges when the most sales happen—basically between October and December.
This year FedEx surcharges are higher for more of their services than previously. Dates range in total from October 5, 2020 to January 17, 2021. The October charges are primarily oversized and additional handling packages. SmartPost and Residential Surcharges will apply from November 2, 2020 through January 17, 2021.
The biggest impact will be on larger retailers who ship a volume over 35,000 weekly average packages.
SmartPost surcharges will be $1.00 starting November 2 and go up to $2.00 for Cyber Week (November 30 and December 6). They will go back down to $1.00 until January 17, 2021.
Residential surcharges may incur up to $5.00 for express and $4.00 for ground. The residential surcharge applies to the Enterprise Level FedEx shipping tier only. The exact residential surcharge will be calculated by the Peaking Factor (the weekly average of packages shipped October 5, 2020 through October 18, 2020, divided by the weekly average packages shipped February 3, 2020 through March 1, 2020, multiplied by 100). Find all the specifics on the FedEx fees and surcharges page.
The main UPS peak season surcharges will be effective October 4, 2020 to January 16, 2021.
The following charges apply to all UPS Air Residential, Ground Residential, SurePost packages with US origins and destinations. These are specific for customers who ship more than 25,000 packages per week. The range of these surcharges is based on the percentage increase during the peak season as compared against February 2020 volume. Less than 110% increase will result in a lower charge, 200-300% a middle charge, and greater than 300% the maximum charge. These charges will apply from November 15, 2020 through January 16, 2021.
- SurePost $1, $2, or $3 per package
- Ground Residential $1, $2, or $3 per package
- Next Day Air Residential $2, $3, or $4 per package
- All Other Air Residential $2, $3, or $4 per package
Specialty charges to note between October 4, 2020 to January 16, 2021
- Additional handling $5 per package
- Large package $50 per package
- Over maximum limits $250 per package
Here is a full list of all UPS surcharges, these include all international shipments and current COVID-related charges. UPS specifically notes that there may be changes or extensions to any of these surcharges, check the UPS surcharge page for the most current information.
Surprisingly USPS has announced a temporary price increase this year, effective October 18 through December 27, 2020. While it’s common for carriers like UPS and FedEx to have holiday surcharges each year, this is the first year USPS has announced higher rates.
The announcement notes that this price increase is “in response to increased expenses and heightened demand for online shopping package volume due to the coronavirus pandemic and expected holiday ecommerce.” There has been a lot of political debate surrounding the USPS’ capacity to handle this year’s forecasted surges, but the service remains confident that it can provide reliable quality as it always has.
The USPS specifies that these price increases are for commercial, domestic parcels only. The services that will be affected by this change include: Priority Mail Express, Priority Mail, First-Class Package Service, Parcel Select, and Parcel Return Service. Retail prices and international products will be unaffected.
The planned increases, per package are noted by service as follows:
- Parcel Select Destination Delivery Unit (DDU) +24 cents
- Parcel Return Service 24 cents
- Parcel Select Lightweight 24 cents
- FCPS Commercial 25 cents
- Priority Mail Commercial 40 cents
- Parcel Select Ground 40 cents
- Parcel Select DSCF 40 cents
- Parcel Select DNDC 40 cents
- Priority Mail Express Commercial $1.50
DHL announced a 4.9% increase on all US shipping effective January 1, 2021. The company has a history of setting annual increases, but not changing those throughout the year. They have not published any additional surcharges for peak season in 2020.
While these are the surcharges announced by the carriers, anyone with a shipping account should check with your carrier representative or fulfillment partners to get a final quote on fees that will specifically affect you.