Dive Brief:
- UPS announced sweeping rate increases including a new charge for third-party billing, a move aimed at online marketplaces that print shipping from their accounts.
- The shipping giant increased its fuel surcharges and nearly doubled fees on oversized items such as furniture, starting Nov. 2.
- Most third-party merchants selling on eBay won’t face the surcharge, since the auction site it has negotiated its own discount; many Amazon sellers may also be exempt.
Dive Insight:
E-commerce has major shippers scrambling to protect their revenues this season, with UPS not only upping fuel and oversized-item surcharges for the holidays, but also moving to curb marketplaces’ use of shipping discounts going forward.
Previously, many online sellers that print shipping labels on behalf of third-party sellers have been able to apply their discounts to those shipments. UPS will assess a 2.5% surcharge for such arranged shipments beginning with the new year.
Most sales on eBay won’t be affected, since the auction site has negotiated its own discount and many of its sellers have their own UPS accounts. But fuel surcharges and oversized fees will be reflected in most online sellers’ purchases almost immediately.
Rates and surcharges at major carriers are projected to rise 5% next year. FedEx has raised its fuel surcharges twice this year, and the U.S. Postal Service (USPS) plans to ask regulators for permission to raise its rates on various packages by 9.5% to 58%.
