Peak season 2020 is almost here, and it’s predicted to be historic. On top of already rising e-commerce sales, the current pandemic has caused a giant digital shift to online shopping for those who traditionally shopped in-store.
Because of the pandemic, U.S. package volume has jumped about 20% for UPS and FedEx. It surged 50% for the USPS in the quarter ending in June compared with the same period a year earlier. With higher-than-average e-commerce sales, comes higher-than-average parcel volume surges, causing panic amongst carriers and shippers alike.
To offset some of this volume, the major carriers have announced their 2020 peak season surcharges. While this is an annual occurrence for FedEx and UPS, this is the first time the United States Postal Service will join in.
This time-limited adjustment will increase prices for commercial customers in line with competitive practices without impacting customers at the retail level. In doing this, the Postal Service is protecting the retail consumer during a vulnerable economic period while increasing prices on commercial volume during heightened volume levels.
No structural changes are planned as part of this limited-time pricing initiative, allowing customers the greatest ease in implementing the new prices with minimal complexity.
A full list of commercial pricing can be found on the Postal Service’s website
FedEx Freight shipping rates will increase by an average of 4.9% for customers who use FXF PZONE and FXF EZONE, and by 5.9% for customers who use FXF 1000 and FXF 501 for shipments within the U.S. (including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands) and between the contiguous U.S. and Canada. FedEx Freight shipping rates will also increase for shipments within Canada, within Mexico, and between the contiguous U.S. and Mexico.
UPS added peak surcharges to ground residential and SurePost deliveries starting May 31. The additional $0.30 per package fee will end on November 14, 2020. This will be replaced by holiday surcharges in effect from November 15, 2020 to January 16, 2021. The charge is between $1 and $4 per package, depending on the service and the peak factor. UPS holiday peak charges are based on your February shipment volume. If you will ship at least 110% of your February volume during the holidays, expect these peak surcharges.
UPS also instituted a $31.45 per package surcharge for customers who ship more than 500 large packages per week. This will go up to $50 on October 4, 2020. The $50 charge expires January 16, 2021. UPS uses the same dimensions to define large packages as FedEX: 96 inches long or 130 inches length plus girth.
Thus far, no major merchant has announced an end to free shipping. Many analysts believe consumers still expect free shipping during the holidays, although they are willing to wait longer for packages to arrive