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United Parcel Service Inc. will apply hefty surcharges on its biggest customers during the holiday peak season to help manage an avalanche of residential deliveries spurred by the coronavirus pandemic.
The company, which skipped holiday fees last year, will add as much as $4 a package for shippers that send more than 25,000 parcels a week and whose peak-season volume is triple February’s level. On the low end, the charge is $1 a package for ground deliveries for big shippers with volume at least 10% above February’s level.
UPS, FedEx Corp. and other couriers have been hit with unprecedented residential package volume amid the pandemic. Deliveries to homes are more costly than those to businesses because there are typically fewer packages per stop and more distance between locations.
“The peak surcharges reflect current market conditions caused by the pandemic, which includes consumer demand and available capacity,” UPS said by email. The fees will “help balance the volume in UPS’ network so we can provide the best possible service.”
The surge in demand has given couriers leverage to raise prices. UPS and FedEx applied surcharges in the spring to high-volume shippers to help ease the pressure on their networks.
UPS’ holiday surcharges apply from Nov. 15 to Jan. 16. From Oct. 4 through Jan. 16, the Atlanta-based company will also charge $50 for each large package and $250 for deliveries that exceed maximum limits, according to UPS’ website.
UPS rose 4.8% to $152.44 at 10:51 a.m. in New York. The stock advanced 24% this year through Aug. 6, while the S&P 500 gained 3.7%.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 2 on the Transport Topics Top 50 list of the largest logistics companies in North America.
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