Holiday shopping may just get a little bit more expensive. UPS announces this week that the company will begin charging “Peak” rates during certain time frames. Between November 19th and December 2nd, UPS will charge $0.27 per package for all ground shipments sent to a residential address.
The extra costs will then go away during early December but, will return once again during December 17th and December 23rd. In fact, UPS announced the company would tack on an additional $0.27 surcharge for ground shipments, $0.81 Next-Day Air, and a $0.97 charge for two-or-three-day deliver.
While an extra charge, which is at most still less than a dollar, may seem like not much. It can be expensive for retailers who ship thousands of packages through UPS during the holidays. As a result, businesses will have to decide whether they should increase shipping rates, raise prices on products, or bite the bullet and pay the surcharge as a cost of keeping the business alive. Moreover, this will be extremely tight for online retailers who promise free ground shipping.
It is important to note that big packages will also be faced with “peak” surcharges on top of standard surcharges on those shipments.
UPS says the money the company makes from these charges can be used to offset expenses for additional delivery trucks, seasonal workers and other operating costs during the holidays. It is important to note during the 2016 holidays, UPS’s average daily volume was more than 30 million packages for more than half of the available shipping days. As a result, UPS hired about 95,000 seasonal employees to handle the large volume of shipments.