Parcel carriers have begun alerting customers that they will be raising costs or adding a peak season surcharge during the holidays. This article will review what we know about the size and timing of these increases, as well as things online sellers can do to lessen the cost impact on you and your customers.
What peak season surcharges and increases have been announced?
- SmartPost – Effective from 11-02-20 thru 11-29-20 and 12-07-20 through 01-17-21, there will be a $1/package fee. That fee will increase to $2/package from 11-30-20 to 12-06-20.
- Residential Delivery Charge – Surcharges will range from $1 to $4 per package for Ground Residential shipments. For Express Residential shipments, surcharges will range from $2 to $5 per package. These surcharges will take effect for shipments from 11-02-20 to 01-17-21.
- SurePost and UPS Ground Residential – effective from 11-15-20 through 01-16-21, surcharges will range from $1 to $3 per package. On September 2nd, UPS announced that SurePost rates will increase by another $0.24 beginning on 10-18-20 as a result of the USPS increase, on top of the potential per-package fee.
- Expedited Services – For UPS Next Day Air Residential and All Other Air Residential, the surcharge will range from $2 to $4 per package.
DHL is adding a $0.29 accessorial fee for all its services from 10-18-20 through 12-27-20.
USPS will have a rate increase during the timeframe of 10-18-20 through 12-27-20. However, they have not confirmed a final rate. Following are their proposed increases for Commercial Plus Rates:
- $0.25 for First Class Package Services Commercial
- $0.40 for Priority Mail Commercial
- $1.50 for Priority Mail Express Commercial
What can you do ensure smooth shipping to your customers this holiday season?
- Encourage your customers to do their holiday shopping early. As the pandemic continues and people stay out of retail stores, it is likely carriers just won’t have the capacity to meet the shipping demand during this peak season. Be up front with your customers about these likely delays so they can buy early and get packages prior to the holidays. Early buying also avoids the peak season surcharge.
- Share sales forecasts with your fulfillment partners. It’s not just the transportation side that will see unprecedented volumes during the coming holiday season. Your fulfillment warehouse will need to proactively plan labor to handle much higher pick and pack volumes. If possible, get accurate volume forecasts to fulfillment partners well in advance.
- Ensure timely and accurate receipts. Anything that facilitates a smooth receiving process means less people and time spent getting your product available for sale. That means accuracy from your suppliers, ASNs, barcoding when possible, and providing timely notice of new items.
- Provide updated delivery messaging on your website. Updating expected delivery times, based on delivery updates from carriers, will avoid calls from your customers.
Peak season surcharges…parcel carrier capacity constraints…labor challenges… For online sellers, 2020 will be a peak season like no other. Your best defense is advance planning to ensure your fulfillment and shipping teams and partners are as prepared as possible when order volumes rise.