Will UPS’s Black Friday delivery surcharge have retailers seeing red?
Christmas is going to get a bit more expensive this year for retailers. UPS announced yesterday that it will add a surcharge to packages delivered during peak holiday shipping periods.
The carrier will tack on 27 cents to packages shipped via ground delivery during the last two weeks of November and the week between Dec. 17 and 23.
For items sent for next-day and second-day delivery, UPS will only add a surcharge for the week between Dec. 17 and 23. Next-day shipments will cost an additional 81 cents per package while second-day air will increase by 97 cents.
Retailers have traditionally focused Christmas marketing efforts on getting customers to make purchases at the beginning of the holiday season (Black Friday) while also pursuing the large number of consumers who wait until the week before Dec. 25 to complete their purchases.
“We’re focused on helping our customers achieve success during some of their most important selling seasons,” said Alan Gershenhorn, UPS chief commercial officer. “To meet their requirements, UPS flexes its delivery network to process near double our already massive regular daily volume, and that creates exceptional demands.”
Patrick Gill, CEO of TackleDirect.com, a site that sells high-end fishing gear, told The Wall Street Journal that UPS’s fees will add costs when businesses such as his that compete against Amazon.com, Walmart and others can least afford it. The added expense means his company will need to shift some of its deliveries to other services.
Mr. Gershenhorn sought to play down the potential impact of the added charges on retailers. “With the new peak charge, per-package costs for many shipments will only marginally increase during this very busy time of the year,” he said.
While UPS rival FedEx has yet to announce whether it will also increase rates for the holiday season, it is common for the two companies to mirror each other’s rates.
- UPS Establishes New Peak Shipping Charge – UPS
- UPS to Add Delivery Surcharges for Black Friday, Christmas Orders – The Wall Street Journal
- UPS to Charge More During Black Friday, Christmas Delivery Surge – Bloomberg
- Can UPS get retailers to share in delivery costs? – RetailWire
DISCUSSION QUESTIONS: How will UPS’s peak fees affect retailers during the Christmas selling season? Do you think retailers will absorb the added costs or pass them on to customers?