Executive Briefings

UPS Expects Retailers to Pay Up for Christmas Deliveries

United Parcel Service Inc. expects most retailers to agree to higher shipping prices during the weeks leading up to Christmas, which it says are necessary because of the glut of online orders.

UPS recently revealed the extra peak-season fee, which will affect packages shipped in the two weeks around Thanksgiving and in the week before Christmas. Discussions with retailers about the charges and their holiday-season forecasts are continuing, but UPS said it expects most shippers will have to pay them.

UPS is encouraging retailers to avoid shipping during those peak-season weeks by holding promotions earlier in November, offering incentives to shoppers to accept later deliveries or other tactics.

“If you can work with us to smooth out the flow, then it reduces your costs as well,” said Chief Executive David Abney. In the week leading up to Christmas, where the surcharge is between 27 cents and 97 cents per package based on the service used, shippers may be able to delay orders that aren’t gifts. “Not everything is a Christmas present,” he said.

Shipping consultants say retailers may have some wiggle room to negotiate other elements of their contracts. UPS still needs prices to rise to cover the costs of delivering packages during a period when daily volumes surge by nearly 60 percent to 30 million.

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UPS recently revealed the extra peak-season fee, which will affect packages shipped in the two weeks around Thanksgiving and in the week before Christmas. Discussions with retailers about the charges and their holiday-season forecasts are continuing, but UPS said it expects most shippers will have to pay them.

UPS is encouraging retailers to avoid shipping during those peak-season weeks by holding promotions earlier in November, offering incentives to shoppers to accept later deliveries or other tactics.

“If you can work with us to smooth out the flow, then it reduces your costs as well,” said Chief Executive David Abney. In the week leading up to Christmas, where the surcharge is between 27 cents and 97 cents per package based on the service used, shippers may be able to delay orders that aren’t gifts. “Not everything is a Christmas present,” he said.

Shipping consultants say retailers may have some wiggle room to negotiate other elements of their contracts. UPS still needs prices to rise to cover the costs of delivering packages during a period when daily volumes surge by nearly 60 percent to 30 million.

Read Full Article