New UPS Updates to Peak Charges

Effective as of June 13th, 2021, UPS has updated and increased the Peak Surcharges applied to certain international shipments originating from Asia, including Japan. All other previously announced Peak Surcharges will remain unchanged. 

There’s typically a peak season for UPS where the demand for products, services, and shipping capacity is significantly higher than average. However, traffic has increased significantly beyond their peak season, pushing the shipping giant to bump up costs.

What Is Peak Traffic?

Traffic is the number of consumers that use a business’s products and services. Peak traffic is when the number of consumers multiplies, and the company is at its busiest. Since the breakout of Covid-19, shipping demands have skyrocketed worldwide. The eCommerce industry is booming, and online transactions have become the preference of businesses and consumers everywhere. 

UPS continues to provide essential service amid the ongoing coronavirus outbreak to support the needs of their customers. The goal is to ensure businesses and customers are able to meet their shipping needs while demand has increased for shipping services.

What Are the Updates?

One or more Peak Surcharges will apply to packages shipped during the specified Peak Periods depending on origins, destinations, and service levels. Peak Surcharges will be applied in addition to all other changes.

These surcharges remain subject to change, but are currently listed at the following amounts:

1. Shipping from China Mainland and Hong Kong SAR to the U.S.

A Peak Surcharge will apply to shipments originating from China Mainland and Hong Kong SAR to the U.S. until further notice. The Peak Surcharge for shipments to the U.S. will be applied as a rate per pound based upon the billable weight of the shipment.

• UPS Worldwide Express Plus® $1.36 per lb. 
• UPS Worldwide Express® $1.36 per lb. 
• UPS Worldwide Saver® $1.36 per lb. 
• UPS Worldwide Expedited® $1.32 per lb. 
• UPS Worldwide Express Freight® $2.15 per lb. 
• UPS Worldwide Express Freight® Midday $2.15 per lb.

1. Shipments from Japan to the U.S.

These Peak Surcharges will follow the same rules as the first update; they will be applied as a rate per pound upon the billable weight of the shipment.

• UPS Worldwide Express Plus® $0.11 per lb. (April 12th to June 12th); $0.34 per lb. (June 13th until further notice) 
• UPS Worldwide Express® $0.11 per lb. (April 12th to June 12th); $0.34 per lb. (June 13th until further notice) 
• UPS Worldwide Saver® $0.11 per lb. (April 12th to June 12th); $0.34 per lb. (June 13th until further notice)  
• UPS Worldwide Expedited® $0.11 per lb. (April 12th to June 12th); $0.34 per lb. (June 13th until further notice)  
• UPS Worldwide Express Freight® $0.34 per lb. (April 12th to June 12th); $0.57 per lb. (June 13th until further notice)  
• UPS Worldwide Express Freight® Midday $0.34 per lb. (April 12th to June 12th); $0.57 per lb. (June 13th until further notice)  

All other Peak Surcharges updated before April 12th, 2021 will remain in effect until further notice, and can be found at UPS.com.

How Does This Affect Me?

We experience small additional fees on so many things in our life that they seem to become insignificant. We might not realize how these small increases can impact our lives and our business, but these charges can add up quickly. 

Anyone that depends on shipping, especially worldwide, will notice an increase in recent carrier invoices or bills. If this increase seems out of the ordinary, then be prepared to shell out more money than usual on a regular basis.

Though UPS has released all the information regarding these updates, they did not notify all their clients who may be significantly impacted by these charges. 

How Can I Mitigate This Impact?

In order to maximize efficiency and keep costs as low as possible, shippers should implement the following practices:

• Consolidate Packages: Consolidate multi-packages into one larger shipment but be mindful of the increased weight and size of the container. 
• Identify Highly Impacted Service Levels and Adjust Volume: Volume could be migrated away from that service level to mitigate impact while these updates are in effect. Ocean carriers are the most expensive forms of shipping overseas, so investigate other UPS options.
• Accept the Charges but Remove Volume Caps: While this strategy does not assist with the problem of peak season surcharges, it does help solve the problem of volume caps. A shipper could accept all peak surcharges without protest but ask/or require the carrier to remove any current volume caps. 
• Pass Along Surcharge to Customer: Since this charge will significantly impact some shippers, an option is to pass along the increased shipping cost to the customer. This can be especially important for shippers who are expediting a higher percentage of shipments since the pandemic. Shipping a higher-than-average percentage of expedited shipments during peak can lead to dramatic spikes in costs.

Peak Surcharges, if managed correctly, do not have to break the bank for shippers. While they may not be entirely unavoidable, there are buffers you can put in place. UPS hasn’t announced exactly how long these surcharges will last or if they’ll be a permanent change, so it’s best to prepare yourself.

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