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            september 21, 2019

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Busworld 2019

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UPS drops delivery surcharges for 2019 holiday season


American multinational package delivery and supply chain management company, United Parcel Service (UPS) has announced that no surcharges will be added to residential deliveries this holiday season, as it gears up for another busy peak season.
UPS chairman and CEO David Abney said: "We delivered a record-setting 2018 peak season in terms of both on-time delivery performance and operations execution. We will build on the lessons learned last year and leverage our new efficient air and ground capacity to make the 2019 peak season another success for customers, investors and other stakeholders."
However, in the 2018 peak season, UPS applied surcharges between US$0.28 and $0.99 on residential packages, while competitor FedEx did not. Due to the ease of online shopping during peak season, UPS delivered between 700 and 800 million packages, which caused a tangible workload increase for the carrier. So it's clear why UPS added the surcharge in 2017.
One way UPS may be compensating for this move in 2019 is by maintaining surcharges for packages that are either too large, unusually shaped or require special handling.
Matthew White at iDrive Logistics said: "This shift largely targets packages that are either unattractive from a UPS cost basis or shouldn't be in the network (over-maximum)."
While FedEx has not commented on its surcharges for 2019 peak season, UPS seems to be taking notes from FedEx's tactic from 2018.
Eliminating the residential fee reveals UPS' comfort level and ability to better engineer its network. In the last year, UPS added 20 new 747-8 and 767 aircraft and updated its automation, processing and delivery facilities as part of a capital investment plan, reports New York's FreightWaves.

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