UPS has unveiled its annual rate increase and peak season surcharges.
The delivery giant will levy a 5.9% average rate hike for its Ground, Air and International services on Dec. 26, according to its website, matching FedEx's increase announced last week. It's a smaller bump compared to last year's 6.9% increase.
"This helps to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS," the company said.
Meanwhile, UPS' surcharges during the upcoming peak season will be higher compared to 2022. Current fees, including for bulky and hard-to-handle packages, will increase in price beginning in October.
UPS 2023 peak season surcharges
| Surcharge name | Services affected | Current surcharge per package | Peak surcharge per package |
|---|---|---|---|
| Additional Handling | U.S. domestic, U.S. import and U.S. export shipments for qualifying customers | $3.50 | $6.90 (Oct. 1 - Jan. 13, 2024) |
| Large Package Surcharge | U.S. domestic, U.S. import and U.S. export shipments for qualifying customers | $40 | $74.90 (Oct. 1 - Jan. 13, 2024) |
| Over Maximum Limits | U.S. domestic, U.S. import and U.S. export shipments for qualifying customers | None | $410 (Oct. 1 - Jan. 13, 2024) |
| Demand Surcharge | Certain UPS Ground Residential, Air Residential and SurePost packages for qualifying customers | Ranges from $0.40 to $0.60 | Ranges from $1.35 to $7.50 (Oct. 29 - Jan. 13, 2024) |
SOURCE: UPS
Customers that qualify for the additional handling, large package and over maximum limits surcharges have either:
- Been billed for more than 1,000 total packages in any week after February 2020
- Been billed for more than 10 combined large packages or packages requiring additional handling in any week after February 2020
- Signed up for a new UPS account after Dec. 31, 2020
The demand surcharge is structured similarly to FedEx's, as it targets high-volume shippers that see a spike in demand during the peak season. It applies to customers billed for more than 20,000 packages any week after October 2022.
The surcharge's cost for each affected service depends on how many more packages a customer is shipping compared to their "baseline" average weekly volume from June 4 through July 1. If a customer's average weekly volume from Sept. 3 through Sept. 30 is less than 80% of that amount, UPS will use that volume amount as the baseline instead.
For example, if a shipper's UPS Ground Residential volume in a week is 175% of the baseline volume, UPS will apply a $2.15 surcharge for each Ground Residential package over 105% of that baseline.
UPS noted on its website that demand surcharges are subject to change, and demand periods may be extended or changed.
