Executive Briefings

Retailers Offer Delayed Shipping Options to Avoid Peak Charges

Retailers are contending with a new challenge as this year’s holiday shopping season heats up: extra shipping fees during the busiest weeks.

United Parcel Service Inc. for the first time is tacking on a surcharge on packages shipped to homes the week before Christmas, hoping to convince companies to send their orders outside peak periods — or to make more money from ones that must be delivered then.

The surcharge has prompted e-commerce retailers large and small to consider other delivery options, such as FedEx Corp. or the U.S. Postal Service, passing the additional costs to their customers, or delaying shipments to cheaper times.

Jeffrey Gornstein, president of home and garden site Comfort House, is one retailer who isn’t using UPS as much this holiday season.

He declined to say how much he anticipates saving by switching some orders to other carriers, a change he began making in October. He saw the added fees as another challenge for smaller retailers. “Carriers implementing surcharges are punishing small merchants at the expense of larger e-commerce players,” Gornstein said.

UPS expects the surcharge, which went into effect on Nov. 19 and lasts until Dec. 3, then returns mid-December, to smooth out the volume of packages it delivers during the holiday season. 

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United Parcel Service Inc. for the first time is tacking on a surcharge on packages shipped to homes the week before Christmas, hoping to convince companies to send their orders outside peak periods — or to make more money from ones that must be delivered then.

The surcharge has prompted e-commerce retailers large and small to consider other delivery options, such as FedEx Corp. or the U.S. Postal Service, passing the additional costs to their customers, or delaying shipments to cheaper times.

Jeffrey Gornstein, president of home and garden site Comfort House, is one retailer who isn’t using UPS as much this holiday season.

He declined to say how much he anticipates saving by switching some orders to other carriers, a change he began making in October. He saw the added fees as another challenge for smaller retailers. “Carriers implementing surcharges are punishing small merchants at the expense of larger e-commerce players,” Gornstein said.

UPS expects the surcharge, which went into effect on Nov. 19 and lasts until Dec. 3, then returns mid-December, to smooth out the volume of packages it delivers during the holiday season. 

Read Full Article