Get ready for the holiday shipping rate increases
With the surge in online shopping since the COVID-19 pandemic it comes as no surprise that major carriers like UPS and FedEx had been working overtime to fulfill demand. As with every year, the major carriers will be increasing surcharges to keep up with new demand and stressed resources. This year however there are several changes taking place in the crucial fourth quarter that merchants need to be aware of. In many cases, third party seller profits can get eaten away by rising expense so here is an outline of the major carrier changes to be aware of.
FedEx Surcharges
Last August FedEx announced their new surcharges for this holiday season. These changes will take effect as soon as early-October and some will run into mid-January.
Oversize Charge – From October 5th through January 17th there will be a $52.50 per package surcharge for any oversized shipment. Oversized is considered by measurements of longer than 96 inches or more than 130 inches in length and girth combined.
Additional Handling Charge – All FedEx Express, U.S. Ground Service and International Ground Service shipment will be subject to a $4.90 per package surcharge. This increase will run from October 5th through January 17th.
SmartPost Peak Surcharge – This applies to all FedEx SmartPost shipments. This service is usually the cheapest of FedEx shipping options and utilizes the U.S. Postal service delivery for final point-of-delivery logistics:
- November 2nd through November29th: $1.00 per package
- November 30th through December 6th: $2.00 per package
- December 7th through January 17th: $1.00 per package
Residential Peak Surcharge – This one is a little tricky since it is based on your overall shipping volume. The surcharge can be anywhere between $1.00 and $4.00 per package for U.S. Domestic Ground Residential Service and $2.00 and $5.00 per package for U.S. Domestic Express Service. Sellers will need to refer to their assigned FedEx area representative to determine individual shipping volume and corresponding rate value.
UPS Surcharges
Unlike FedEx, UPS rate increase are less granular and based almost entirely on volume. Expect a $1 to $4 per package increase. Your actual surcharge amount will depend on your February 2020 shipment volume. Surcharges start when you reach 110% of your February package volume and with vary upon service and peak factor. This surcharge will begin on November 15th, 2020 and expire on January 16th, 2021.
In addition to the per-package volume surcharge, UPS has also instated a $50 per large package surcharge for their customers who ship more than 500 large packages per week. This surcharge begins on October 4th, 2020 and will continue through January 16th, 2021. UPS uses the same formula as FedEx for their definition of “large” packages which is 96 inches long or 130 inches in length plus girth.
U.S. Postal Increase
USPS will begin a temporary price increase starting on October 18th, 2020 ending on December 27th, 2020. Expect to pay anywhere from $0.24 to $1.50 more per shipment depending on the service. These increases seem subtle however it’s worth considering your volume and overall shipping costs when compared to similar services from FedEx and UPS.
How Channel Bloom Can Help
When selling on marketplaces like Amazon and eBay using the Channel Bloom service you can customize the items you want to list and those you do not. During the hectic holiday season there could be substantial benefits in removing large and heavy items from your marketplaces to avoid costly surcharges and remain profitable while taking advantage of peak volume with smaller more cost-friendly items. Add to this a savvy shipping software partner like ShipStation and you will be positioned for holiday success.