UPS will soon start assessing a surcharge for residential package deliveries.
Shipping some items directly to your front door may soon get a little more expensive.
UPS plans to assess a surcharge for residential deliveries, Reuters reports.
The residential surcharge is driven in large part by the shipping company’s dismal fourth quarter, where profits fell short of expectations. Reuters said:
The Atlanta-based company had mobilized more workers and equipment for an anticipated surge in holiday packages, but the extra business failed to materialize. The additional costs primarily affected the company’s domestic ground package unit.
UPS said home deliveries, oftentimes just a single package, can cost upward of three times as much as business deliveries, where multiple packages are delivered, Consumerist reports.
“These pricing strategies will be designed to ensure we are properly compensated for the value we provide,” UPS chief executive officer David Abney said on a conference call.
According to Reuters, the residential surcharges will be phased in over the next several years as UPS renegotiates contracts with big customers. The surcharges will eventually trickle down to consumers’ bottom line.
“As companies renegotiate their deals with UPS, expect to see fewer free shipping offers or for e-tailers to increase their minimum orders for free shipping,” Consumerist said.
More centralized delivery locations, where multiple packages can be dropped off and picked up, could also follow. Amazon Locker depots are already set up in some retail locations.
“Don’t be shocked to see Amazon try to make these more attractive, especially for Prime subscribers, and other companies attempt to replicate this model,” Consumerist said.
I live in a small town with few retailers, so I do a lot of online shopping. In fact, I do enough online shopping that my UPS delivery driver has joked that I provide him with job security. For me, one of the biggest appeals of shopping online is having packages delivered to my front door.
But I despise paying shipping costs. It’s one of the reasons I became an Amazon Prime customer. As a rule, I only order from companies that have free shipping options available.
I also find it especially frustrating to talk about delivery surcharges at a time when fuel prices are down.
What do you think of having to pay a surcharge to have UPS deliver packages to your front door? Share your comments below or on our Facebook page.
Let’s face it: Sometimes we have to resort to desperate measures. For some tips on how to ship, last minute, at the best rate, check out the video below.