With the holiday season quickly approaching, UPS and FedEx continue to add additional surcharges in 2024. Do carriers ever consider the impact these changes will have on your transportation budget? The short answer is rarely. This is left up to the shippers.
Let’s walk through some of the recently announced changes for 2024… Delivery Area Surcharges, Zonal Re-Classification, Accessorial Fuel Surcharges…and Peak/Demand surcharges.
The new caveat is the charges will start in September, with the greatest impact affecting the holiday time period of November 24 through December 30, with some peak charges carrying through the holiday returns period of December 31 through January 19.
Let’s look at the timeline….
DAS changes…
Effective April 6, 2024, an additional eighty-two (82) zip codes in eight (8) cities within eight (8) states (primarily in Urban areas) were added to a list of destinations that were to be included in the Delivery Area Surcharge (DAS) category. Applicable to both UPS Ground and Air services. Considering what UPS charges (2024) for Ground DAS Commercial ($3.95), Ground Residential ($5.70), Air Commercial ($3.95) and Air Residential ($5.85) surcharges.. one can only imagine the impact these changes may have on a transportation budget.
Zonal Re-Classification…
Effective June 17, 2024. A Zonal reclassification was announced. Many of those affected zones coincided with the same destination zips incurring the “new” DAS charges. Today’s Zone 2 delivery could be tomorrows Zone 3…something to consider…
Accessorials now added to Fuel Surcharge calculation…
Effective August 19, 2024, UPS announced a “new” list of accessorials that would be included in the fuel surcharge calculation. Expect an uptick to your overall transportation charges depending on your most used accessorials. A complete list can be found: Accessorial FSC List for Web – 20240814 v2.xlsx (ups.com)
Peak/Demand Surcharges…
Effective September 30, 2024 (UPS) and Oct 1, 2024 (FedEx) and through the holidays, both carriers announced changes to their Peak/ Demand fee structure. Although both carriers follow a similar schedule and application criteria…there are some nuances that can have an impact on those that qualify. Depending on which week a company chooses to begin their “Peak” shipping activity. While the “hardest hit” timeframe remains November 24-December 30, 2024, (traditional Holiday Season), one needs to consider returning all those unwanted gifts from Santa typically occurs between December 31, 2024-January 19, 2025. Rates will vary slightly between both UPS and FedEx. Overall, expect a range of a 9-10% increase over last year between both UPS and FedEx.
Now if the time for shippers to evaluate the impact of these ever-increasing charges…
Shippers need to prepare for this impact, especially going into the peak holiday season. With over 30 years in the industry, a team with 500 years of combined experience working for the carriers and 10’s of thousands of contracts reviewed, AFMS will provide a NO COST evaluation of the impact that either UPS and/or FedEx may have on your bottom line. In many cases AFMS can help eliminate or at least mitigate these charges.
For a detailed analysis contact AFMS at 800-246-3521 or complete our contact form at www.afms.com.
