Following on the heels of FedEx’s move earlier this year, UPS plans to update its fee structure for larger parcels, decreasing the size of items that incur an extra $10.50 handling charge.
Under the new rule, packages with a long side of 48″ or more will be subject to the charge as of June 6. The previous threshold was 60″. FedEx told analysts in March it would make the same change, effective June 1. Both carriers also raised the handling charge from $9 to $10.50 in January.
FedEx has provided more detail on its changes. The handling charge will also apply to packages weighing more than 70 lbs, with a second-longest side of 30″ or greater, or that are not fully encased in an outer shipping container, among other requirements. Any piece, skid or pallet that is non-stackable will also be hit with the charge, FedEx says.
Both FedEx and UPS have been seeing more bulky items in their networks, as consumers have grown more comfortable with ecommerce and are ordering things like patio furniture, tires and golf bags online. The carriers’s systems and facilities weren’t designed for them, so more manual handling – and thus cost – is involved.
“We’re always evaluating our fees and charges, adjusting them to align with actual operational costs,” said UPS spokesman Matthew O’Connor. “And with the growth in ecommerce, we’re seeing more large packages compared to what we used to.”
“We are seeing a significant increase in non-traditional items now being purchased online, mattresses to new swing sets and big-screen TVs just to name a few,” FedEx executive vice president Mike Glenn told analysts on a third quarter earnings call. “We welcome this opportunity but it is important that we price these items accordingly to account for the operational complexities, such as manual sortation to person delivery, etc.”
O’Connor of UPS added the rate change doesn’t affect UPS air or international shipments, which still use the 60″ threshold. He also said that while there have been more bulky items in the network, they only represent a small percentage of UPS’s total volume.