What Do the New UPS Surcharges Mean?
To help shippers understand UPS’s recent surcharge increases, Spend Management Experts, a supply chain spend management consultancy, outlines the carrier’s new fees and their potential impact.
The Increases:
Effective June 4, 2018: The fee for over maximum limits and the oversize pallet handling surcharge increased by $150 and a new shipping charge correction audit fee was added.
Effective June 11, 2018: The ground fuel surcharge increased by 0.5 percent for all thresholds.
Effective July 8, 2018: The large package surcharge for any U.S. domestic package delivered to a residential address is $90 and the additional handling surcharge for any U.S. domestic package exceeding 70 pounds in actual weight is $19.
What THE rate increases Mean:
On top of the average 4.9-percent annual rate increase, additional surcharges mean even higher costs to shippers. Here are some examples:
- The over maximum charge tends to impact those large, heavy items that really belong in the UPS Freight or other LTL network.
- Oil prices have gone up double-digits since 2017, and to make sure UPS is not negatively impacted by any sudden fluctuation, it has changed its fuel surcharge. Earlier in 2018, UPS changed its international export fuel surcharge for similar reasons.
- Along with the over maximum charge, the large package fees are for those items that exceed 130 inches in girth or with one side greater than 96 inches.
What Shippers Can Do:
To mitigate the impact of these recent increases, it is important for shippers to identify opportunities to optimize their supply chain networks. Recommendations:
- Audit invoices every week.
- Negotiate—almost everything is negotiable.
- Still not happy after negotiations? Be willing to diversify your carrier base. There are other options.