USPS logo LINK — USPS employee news Printable

Rate of change

Commercial shippers consider more price hikes

Package delivery
Changes in commercial shipping rates could mean higher prices for consumers, CNBC reports.

Two major commercial delivery companies are considering additional price hikes this year, including surcharges during the peak holiday season, CNBC reported this week.

UPS and FedEx each raised dimension (DIM) weight pricing formulas about six months ago, charging customers higher rates for ground packages based on a combination of size and weight.

The carriers also increased the fees they charge customers for fuel.

Now UPS is considering shipping surcharges for the holidays, CNBC reported. The company also is focused on “multichannel retailing” — delivering packages to stores for consumers to pick up, a process that’s three times less costly than home delivery.

The company wants to maximize capacity and boost margins, even it means turning down some business, according to CNBC.

“It’s initiating more of a pricing strategy where it’s going after some of its retail customers and looking to price up some business, particularly e-commerce business,” industry analyst Christian Wetherbee told the cable network.

FedEx also is expected to “push on pricing” during the holidays — which could open new business opportunities for other delivery services, Wetherbee said.

“We actually think there’s a lot more momentum for … the small package carriers,” he said.

Post-story highlights