UPS Raises Prices for Key Holiday Weeks

Move adds to margin pressures in the retail sector

June 19, 2017

UPS said it would tack on surcharges to deal with surges of delivery demand during key holiday season shipping weeks, which could pressure retailers who are already squeezing margins hard.

The surcharges apply during a two-week window starting on Black Friday, and again in a one-week window in the days leading up to Christmas. The charges range from 27 cents to 97 cents per package.

Other delivery services may see the UPS move as an opportunity to nudge their own prices higher but no other changes were announced immediately.

Consumers have steadily increased the amount of purchasing done online, ratcheting up the pressure on logistics networks. eMarketer estimates that ecommerce sales in the US will total $450.81 billion in 2017, a 15.3% increase over 2016.

But the growth is coming amidst ferocious competition over delivery pricing, with Amazon and Walmart in particular jousting over pricing and options. For its part, Amazon has reduced the minimum order required for non-Prime members to receive free shipping two times this year, lowering it to $25. Walmart has unrolled delivery price reductions of its own, plus discounts for consumers who pick up online orders in-store.