Daily Management Review

It’s ‘Second Christmas’ For UPS


Shipping network sees delivery spike as online sales pick up amid lockdown, inevitable raising the cost at UPS.

The term “second Christmas” seem to stick to “United Parcel Service Inc” during the COVID-19 pandemic as the “U.S. e-commerce companies” have seen a surge in the surcharges while the delivery network has been “flooded” with shipment from the size of “packed food” to “patio furniture”. Moreover, UPS has decided to “slap surcharges” on May 31, 2020.
The increase in the fees are commonly seen during the “winter holiday season” as the volume of packages increase by two times. However, at present, post the “stay-at-home” order in an attempt to contain the spread of COVID-19 pandemic, people turned to online shopping ushering in the “second Christmas” for UPS and its peers like FedEx Corp.
In a revised fee, the “high-volume shippers” will be charged high for transporting “oversized items”. This way, cost could be driven up amid the fights of retailers to “shelter profits”. During the lockdown, Amazon, Walmart Inc’s online platform and Target Corporation saw their sales jump. Likewise, the home deliveries have also increased in number which is causing the costs at UPS to rise.
As per Reuters report:
“In April, UPS said home deliveries accounted for roughly 70% of shipments versus around 50% previously. Dropping packages on residential doorsteps is less lucrative than delivering to businesses because it requires more truck miles and stops per route”.
However, recently FedEx had informed that it would be limiting the “number of parcels” that customers will be allowed to send “directly from stores”.