Visit Our Sponsors
The surcharges, announced last week, are a shot across the bow for retailers, including giants such as Wal-Mart Stores Inc. and Macy's Inc., that have been ramping up their e-commerce businesses as they seek to offset declining foot traffic to shopping centers. It also adds to the costs of Amazon.com Inc. and other online players, which rely on UPS and rival FedEx Corp. to handle a surge in holiday shipments.
The fees will force retailers to decide over the next few months whether to raise shipping prices — something that is difficult to do when online shoppers are reluctant to pay shipping fees — increase the prices of goods or eat the extra costs themselves. Some may seek to avoid the surcharges by spreading holiday deals to other weeks during the season.
Patrick Gill, chief executive of the high-end fishing gear site TackleDirect.com, said news of the surcharge was frustrating since it is going to be applied when his site needs lower rates to compete against Amazon.com , Wal-Mart Stores and others.
“This will add up to be another unaccounted for expense during the holiday season,” Gill said. “It will force us to push some product away from UPS in some cases.”
Enjoy curated articles directly to your inbox.