UPS Lowers Peak Surcharge

UPS Lowers Peak Surcharge

UPS fuel surcharges

In a possible sliver of light at the end of the tunnel, UPS lowered its peak surcharge for China-US Shipments this weekend.

Over the course of the COVID-19 pandemic, we’ve seen carriers consistently increase peak surcharges on a regular basis. These increases were seen as a response to the increased difficulty in moving packages in the new environment.

For some of the peak surcharges, there were suspicions that they may last all the way through the end of the holiday season. A decrease in peak surcharges, especially relating to China, might be an indication that shipping is starting to normalize.

Markets have been on a wild ride throughout this crisis, going from historical lows to record-breaking highs. The significant increases in freight charges seemed to be another indicator that we were in for a bumpy road ahead.

That’s not to say that we are out of the woods yet, far from it. Other surcharges are still in place, and some are quite hefty.

New (Decreased) Peak Surcharge

The following shows the decrease in peak surcharges (per pound) for shipments from mainland China to the United States.

Service 5/24 – 6/27 6/27 until further notice Reduction Total
UPS Worldwide Express Plus $0.79 Per Pound $0.57 $0.22
UPS Worldwide Express $0.79 $0.57 $0.22
UPS Worldwide Saver $0.79 $0.57 $0.22
UPS Worldwide Expedited $0.75 $0.52 $0.23
UPS Worldwide Express Freight $1.81 $1.36 $0.45
UPS Worldwide Express Freight Midday $1.81 $1.36 $0.45

If history is any guide, it’s likely that other carriers will follow suit. Hopefully, this will be the beginning of a trend going forward.

Other Surcharges Still in Place

Through the course of the COVID-19 pandemic, all carriers have raised their surcharges. For example, FedEx recently followed UPS in adding a peak surcharge for oversized packages that was $30 per package. While the decrease in peak surcharge that went into effect this weekend is a good sign, shippers are still dealing with an environment where costs are significantly more burdensome than normal.

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