Peak Season Surcharges 2021: Let the Shipathon Begin

by | Aug 31, 2021

5 min read

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Get your wallets out. Carriers have posted their surcharges for peak season 2021.

While the official shipping peak period has yet to begin, the pandemic has thrown a wrench in everything considered standard.

The eCommerce boom has affected UPS and FedEx in an unprecedented way, raising them to heights they’ve never seen before.

Shippers are struggling to meet the rising costs associated with their carriers while also satisfying the increasing expectations of their consumers. So you might as well be working with a double-edged sword.

There is a lot to unpack and plan for. And if you want to end Q4 with a bang, here’s everything you need to know about these surcharges.

Mark Your Calendars

Starting October 4, 2021, FedEx will be raising its additional handling fee to $5.95, which is set to stand until January 16, 2022. UPS is kicking things off a bit earlier on October 3, 2021, where they will raise current additional handling from $3.50 per package up to $6.00 each, which will be in effect until January 15, 2022.

How will your oversized and large packages be handled?

  • FedEx: From October 4, 2021, to January 16, 2022, the surcharge amount is $62.50 for each parcel. An oversize charge applies to packages that exceed 96 inches in length or 130 inches in length and girth.
  • UPS: October 3, 2021, through January 15, 2022, will see a $60.00 fee per large package. A surcharge is applied for large packages if the length plus girth [(width x 2) + (height x2)] combined exceeds 103 to 165 inches or the package length is 96 to 108 inches.
  • DHL: Did not include an oversize surcharge with their peak season release.
    • It’s speculated that because these charges are high as standard, an increase may not be necessary. (We will update following any further announcements)

What About Packages Over Maximum Limits and Unauthorized Parcels?

Parcels that do not meet the strict requirements for both length and weight (as outlined below) will be subjected to the “over max limits” or “unauthorized parcel” fee, and it’s pretty steep. We’re talking $350 per package if it’s going through FedEx and slightly less for UPS at $250 each. That’s a lot of pennies!

FedEx: Defines “Unauthorized Parcels” as:

  • Any shipment measuring more than 108 inches in length.
  • A shipment measuring more than 165 inches in length and girth combined.
  • Any parcel weighing more than 150 lbs.

UPS: Defines “Over Maximum Limits” packages as:

  • Packages weighing more than 150lbs
  • Packages exceeding 108 inches in length
  • Packages exceeding a total of 165 inches in Length + (2 x Width) + (2 x Height) combined

Residential Increases – FedEx

If things weren’t already confusing, it’s about to get technical.

FedEx is running 2 phases of surcharges this year.

For the first round:

They’ll be charging customers extra who ship more than 25,000 weekly (on average) residential and express packages from October 4, 2021, to October 17, 2021.

If they’ve met that threshold, shippers will see an increase in surcharges later in the year. The increase would go into effect starting November 1, 2021, and last until December 12, 2021.

The specific amount FedEx will charge shippers is calculated by taking the weekly average of packages shipped from October 14 to 17, divided by the weekly average of packages shipped from February 3, 2020, to March 1, 2020, multiplied by 100.

(Fees for both FedEx Residental Express and Ground Residental packages will be determined separately.)

Second Round of Surcharges for FedEx

For shippers exceeding 25,000 weekly (on average) packages from November 15 to November 28, 2021, they will be charged a higher increase starting December 13, 2021, through January 16, 2022.

The carrier will again use a pre-covid benchmark to calculate the amount shippers will be charged. The weekly package average from November 15 – 28th, 2021, is divided by the weekly package average from February 3 to March 1, 2020, and multiplied by 100.

FedEx provided the following chart to illustrate their breakdown of “peaking factors” and their associated costs.

Peaking Factor
(based on your delivery volume)
>110% to 200%>200% to 350%>350% to 500%>500%
Charge per U.S. Domestic FedEx Ground® Residential Package$1.15$2.25$3.50$5.00
Charge per U.S. Domestic FedEx Express® Residential Package $2.15$3.25$4.50$6.00

 

FedEx Ground Economy Surcharges

If you’re using this contract service, FedEx has some rounds for you too. Applicable to all who use this service, regardless of shipping volume.

 $1.50 per packageNov. 1, 2021–Nov. 28, 2021
$3.00 per package
Nov. 29, 2021–Dec 12. 2021
$1.50 per package Dec. 13, 2021–Jan. 16, 2022

 

FedEx Delivery Charge

 

Yes, there’s more.

Starting January 17th, 2022, FedEx is furthering the charges with an additional $0.60 per package for customers that shipped more than 25,000 weekly average residential and ground economy (total for FedEx Express and FedEx Ground U.S. domestic) parcels during peak season. (October 4th, 2021 – January 16th, 2022)

This charge applies to FedEx Express and FedEx Ground U.S. domestic residential packages (excluding FedEx Ground Economy and FedEx One Rate packages).

 

Residential Surcharges – UPS

Peak Season 2020 saw a similar approach from UPS by categorizing shippers who exceeded a specific amount of parcels weekly. They’re taking the same route this year, with 5 tiers as opposed to 2020s 3.

And both carriers have taken the approach of measuring shippers’ volume to their pre-pandemic numbers. As a result, UPS peak surcharges will apply to customers who shipped over 25,000 packages during any week following February 2020.

UPS will be implementing the following increases effective October 31, 2021, through January 15, 2022:

Peaking Factor
(based on your delivery volume)
100% - 200% of Feb. 2020 Volume200% - 300% of Feb. 2020 Volume400% - 500% of Feb. 2020 Volume>500% of Feb. 2020 Volume 
UPS SurePost$1.15$2.15$3.15$4.15$5.15
UPS Ground$1.15$2.15$3.15$4.15$5.15
UPS Next Day Air$2.15$3.15$4.15$5.15$6.15

 

DHL – Surcharges

It’s essential to understand the charges and timeframes of all carriers, and with the latest rollouts from DHL – you now have access to a full comparison of the three. DHL kicks off their peak season charges on October 3rd, 2021, and they run until December 25th, 2021.

 

The Choice is Yours

 

Navigating through these carrier surcharges to assess what will work best for your specific needs will be challenging and time-consuming. But with logistics intelligence, you can bypass the complexities of peak season and identify opportunities across all carriers.

 

Take Advantage of Technology to Overcome These Costs with Advanced Logistics from Sifted

By unifying your systems, understanding your data, and automating your processes, you can optimize your shipping and gain visibility into your supply chain. That’s where Sifted can help, and we have a team fully dedicated and equipped to help you feel more empowered with your shipping strategy.

Try a free demo today to dig into your data and check out our Peak Season Prep Class to get your ship in order before peak.

Topics: Carrier Optimization, Peak Season, Shipping Costs, Surcharges

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