UPS 2024 Rate Increases and 2023 Peak Season Surcharges – What to Know

UPS has dropped some significant news that could affect shippers and consumers alike with one of the largest rate increases in recent memory, set to take effect on December 26, 2023.

This increase, averaging 5.9% across all services, is in line with FedEx rate adjustments and the carrier justifies these adjustments by stating that it is necessary to support ongoing expansion and capability enhancements while maintaining the high service levels that customers expect.

However, what may raise eyebrows even more than the rate increase itself are the hefty demand surcharges that are set to be imposed during the peak holiday season. Demand surcharges are extra fees imposed by the carrier on shipments during specific times when demand for shipping services is exceptionally high.

In UPS’s case, this will primarily affect shipments during the peak holiday season, which runs from October 1, 2023, to January 13, 2024. These surcharges can significantly impact the cost of shipping, especially for certain types of packages.

Let’s delve deeper into some key aspects of these demand surcharges:

  1. Additional Handling Surcharges: One of the most notable surcharges is the Additional Handling surcharge. This surcharge typically applies to packages that exceed specific size and weight limits or have irregular dimensions. Prior to the rate increase, shippers were paying $3.50 per package for this surcharge. However, during the peak season demand period, this surcharge will skyrocket to $6.90 per package. If you regularly ship large or bulky items, this increase can hit your bottom line hard.
  2. Large Packages: UPS defines large packages as those whose combined length and girth exceed 130 inches or whose length alone exceeds 96 inches (for domestic shipments). Currently, these packages are subject to a $40 surcharge per package. During the peak season, this surcharge will nearly double to $75.90 per package. For businesses or individuals dealing with oversized items, this increase could have a substantial impact on shipping costs.
  3. Other Peak Season Surcharges: While the Additional Handling and Large Package surcharges are among the most prominent, there are other peak season surcharges based on volume and various criteria. While these may not affect the majority of shippers, those who use UPS negotiated rates from third-party sources should be aware of the potential impact on their shipping expenses.

Here are the full details, which may include other factors when these surcharges apply.

Tips To Manage UPS Peak Season Surcharges

Given these significant surcharge increases, shippers should exercise caution, especially those who frequently deal with large or bulky items. Here are some strategies to consider:

  • Double-Check Package Measurements: To avoid these surcharges, it’s imperative to double-check the measurements of your packages, especially if they are close to the threshold for Additional Handling or Large Package surcharges. Even being slightly over the limit can result in a substantial surcharge. Utilize UPS’s guidelines on how to measure packages accurately.
  • Record Measurements: If you find your packages are close to these surcharge thresholds, consider recording the measurement process with your smartphone. This can serve as evidence that your package was within the allowable dimensions and can be a helpful tool in case of disputes.
  • Consider Packaging Strategies: Depending on your business or shipping needs, you might explore packaging strategies to reduce the likelihood of triggering these surcharges. This could include finding ways to make your packages more compact or exploring alternative shipping methods.

It’s crucial to note that UPS measures packages very precisely, rounding up measurements to the nearest inch. This means that even a fraction of an inch over the limit can result in the imposition of these surcharges.

The Bottom Line

In summary, shippers must prepare themselves for the imminent rate hike and the added burden of peak season surcharges. Additionally, sellers dealing in bulky items who provide post-Christmas free returns or exchanges will face a dual challenge, with both increased rates and peak season surcharges weighing heavily on their shipping expenses.

Understanding the specifics of these surcharges and taking proactive measures to avoid them can help mitigate the impact on your shipping costs. Whether you’re an online business seller or an individual shipper, being well-informed and prepared for these changes will be essential as we approach the holiday season and the new year.

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