Dive Brief:
- UPS will raise its large-item handling fees starting June 4, requiring large-item shippers to pay a $650 Over Maximum Limits or Oversize Pallet Handling Surcharge if they send such products over the small parcel network, The Wall Street Journal reported.
- The surcharge "is intended to encourage shippers to use the UPS Freight network for these large items," UPS said in a statement emailed to Supply Chain Dive.
- Customers will also have to pay an auditing fee — of either $1 per package or 6% of total shipping charge corrections — if invoiced shipments do not match the dimensions measured by UPS upon receipt, DC Velocity reported.
Dive Insight:
As the world sees a boost in e-commerce volumes, third-party logistics providers (3PLs) have been the backbone for that growth. While at first the companies absorbed the cost, recent surges in demand have strained supply chains and challenged 3PLs' ability to meet service expectations.
In the past year companies responsible for distributing goods — like UPS and Walmart — have made it clear they intend to pass some of the costs to shippers, through either higher rates or fees. This, they hope, will reduce logistics strain through higher shipment accuracy.
The problem UPS is trying to correct now lies in mixed truckloads, in which a retailer looking to fulfill online orders may send a washing machine and several parcels, at once. While this may be the optimal use of transportation capacity for the shipper, small packages require different handling and facilities from large items.
"These items also require extraordinary special handling in a small package facility and generate additional cost," UPS said.
New audit fees, meanwhile, demand more precision by shippers when sending product through UPS in order to decrease both operating costs at facilities and the number of billing corrections by the company.
Shippers are responsible for entering the dimensions of their products into UPS' receiving system, but sometimes they do so incorrectly. The logistics provider automatically verifies each delivery's size and weight, incurring costs in the process, which UPS will now recover from shippers if the clients do not meet specifications.
