All carriers are already implementing new peak season surcharges. And with several months remaining until the official beginning of peak — it could be as soon as Halloween if Amazon pulls another early launch of Black Friday — understanding these surcharges is essential to keeping shipping spend in check. But there’s plenty of confusion surrounding this issue as the charges evolve over time. So let’s dig into a comparison of the two and how it all amounts to needing a better solution to track your supply chain financial data and cost.
UPS Versus FedEx Handling Surcharges
UPS is charging an additional handling surcharge of $3.60 per package until October 2, 2021, and that surcharge is set to increase to $6.00 per package from October 3, 2021, through January 15, 2022. Meanwhile, FedEx has implemented a $5.95 surcharge for packages sent between October 4, 2021, and January 16, 2022. That’s an increase from the $3.00 handling surcharge active through October 3, 2021.
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Large package surcharges at UPS are also occurring, with a $40.00 surcharge until October 2, 2021, and up to $60.00 through January 15, 2022.
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FedEx is charging a peak oversize charge of $62.50 per package from October 4, 2021, through January 16, 2022.
It’s important to note that large package surcharges are different from packages that are clearly beyond limits. In other words, these items may be larger but do not yet reach the threshold of needing LTL transport.
Unauthorized Packages & Over Maximum Limits Explained
Both carriers have announced additional charges when a shipment is routed by parcel rather than the LTL network at either UPS or FedEx. FedEx calls these charges “Unauthorized Packages,” and UPS calls them “Over Maximum Limits.”
However, the difference between costs for both is stark for the upcoming peak season.
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UPS Over Maximum Limits cost $250.00 per package.
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FedEx charges $350 per shipment for the Peak Ground Unauthorized Package Charge.
It’s also worth noting that, as of this writing, the peak season surcharges of UPS versus FedEx have both left room for additional increases.
Other Peak Season Surcharges Exist in the UPS Versus FedEx Battle
Both carriers also have existing surcharges to customers based on different peaking factors — measuring the volume shipped against dates based on February 2020 volumes.
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Now let’s consider the FedEx Peak Factor Surcharges that come with a detailed explanation of what time periods are considered, including both pre-pandemic and current volumes:
“For customers who ship more than 25,000 weekly average residential and FedEx Ground Economy packages (total for FedEx Express and FedEx Ground U.S. domestic) from Oct. 4, 2021–Oct. 17, 2021, the Peak Residential Delivery Charge reflected in the chart below will apply Nov. 1, 2021–Dec. 12, 2021. The amount charged per package will be based on a Peaking Factor, calculated as weekly average residential and FedEx Ground Economy packages shipped Oct. 4, 2021–Oct. 17, 2021, divided by weekly average residential and FedEx Ground Economy packages shipped Feb. 3, 2020–March 1, 2020, multiplied by 100. The peaking factor and amount charged are determined separately for FedEx Express and FedEx Ground.
For customers who ship more than 25,000 weekly average residential and FedEx Ground Economy packages (total for FedEx Express and FedEx Ground U.S. domestic) from Nov. 15, 2021–Nov. 28, 2021, the Peak Residential Delivery Charge reflected in the chart below will apply Dec. 13, 2021–Jan. 16, 2022. The amount charged per package will be based on a Peaking Factor, calculated as weekly average residential and FedEx Ground Economy packages shipped Nov. 15, 2021–Nov. 28, 2021, divided by weekly average residential and FedEx Ground Economy packages shipped Feb. 3, 2020–March 1, 2020, multiplied by 100. Peaking Factor and the amount charged are determined separately for FedEx Express and FedEx Ground.”
With that in mind, here are the breakdowns for the “Peaking Factor” surcharges at FedEx and by service level.
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UPS Applied Peak Surcharges to Shipments
From China Mainland and Hong Kong.
UPS announced in June that it would assess peak season surcharges on these shipments, ranging from $1.13 to $1.93 per pound.
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