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Carrier Surcharges are in the Air, Industry Braces for Peak Season

Carriers announce new/adjusted peak season surcharges, and seasonal hiring continues to amp up. Peak season is nearly here.

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PARCEL CARRIER NEWS

FedEx
  • 🆕 The carrier updated their Peak Surcharges and Shipping Rates page on Aug 13, 2021.
  • 🎄💰 The Peak Residential Delivery surcharge will go into effect Nov 1 through Jan 16, 2022, replacing the existing $0.60/per package with a revised peaking factor.
    FedEx - 2021 Peaking Factor

    • The carrier continues to use Feb 2020 volume as a baseline to determine peaking factors.
      • Nov 1 – Dec 12, 2021 Peaking Factor Baseline 🎃
        Peak Residential Delivery Surcharge will be based on Oct 4 – Oct 17 volume over Feb 2020 average.
      • Dec 13, 2021 – Jan 16, 2022 Peaking Factor Baseline 🦃
        Peak Residential Delivery Surcharge will be based on Nov 15 – Nov 28 volume over Feb 2020 average.
  • Find more information about FedEx surcharges, including peak season surcharges.
UPS
  • The carrier will hire 100,000+ seasonal employees this year and plans to expedite the process by ditching formal interviews in lieu of online applications, aka quick hires. ⏰ UPS expects to make quick hire job offers within 30 minutes of application. 🔥
  • Why so many seasonal employees?
    • UPS expects peak package delivery to exceed capacity by about 5 million pieces per day.
  • What jobs will be for hire, and why work for UPS?
    • Full and part-time seasonal positions: 📦 package handlers, 🚚 drivers, 💪 driver helpers & personal vehicle drivers.
    • 💰 Competitive wages and multiple shifts in hundreds of locations across the country.
    • 🗓 Quick hiring and onboarding – job offers presented within 30 minutes, new employees can begin working with 1-2 days from offer.
  • Leadership Quote: “We’re preparing for another safe, record peak holiday season. With COVID-19 continuing to impact Americans, our services are more important than ever,” said Nando Cesarone, President, U.S. Operations. “We plan to hire more than 100,000 people for seasonal jobs, many of whom will have an offer in hand within 30 minutes of applying. Our seasonal hires will help us provide the most reliable service in the industry, just like we did last year.”
  • ⚠️ Note: Quick hires applies to most common jobs for seasonal workers; package handlers and driver helpers. These employees take a package from a truck and deliver it to doorsteps, but do not drive delivery vehicles.

GRI & SURCHARGES

  • 🎄 DHL eCommerce
    • DHL eCommerce has announced Peak Surcharges that will effective from October 3, 2021 through December 25, 2021. Affected products include SmartMail Domestic, SmartMail Return, USPS, International, and Canada based customers. Read the announcement for more details.
  • 🎄 FedEx
    • FedEx has announced their Peak Season surcharges. The Peak Additional Handling Surcharge, Peak Oversize Charge, and the Peak Ground Unauthorized Package Charge will be effective from October 4, 2021 through January 16, 2022. The Peak Surcharge on Ground Economy Package Services runs from November 1, 2021 to January 16, 2022 and includes an increase on November 29 and then a subsequent decrease on December 13. The Peak Residential Delivery Charge for Express and Ground will again be based on a peaking factor and is effective from November 1, 2021 to January 16, 2022. On January 17, 2022 the Peak Residential Delivery Charge becomes a flat $0.60 fee per package. Read the announcement for more details.
  • 🎄 FedEx Canada
    • FedEx Canada announced that the international Peak Surcharge will increase in certain lanes beginning September 13, 2021, with another set of lanes increasing on September 20, 2021. The statement on the FedEx Canada website reads “Beginning September 13, 2021, the surcharge amount for FedEx Express international package and freight services for shipments originating in China destined to Canada, as well as freight services for shipments originating in South Korea destined to Canada will increase. Also, effective September 20, 2021, the surcharge amount for freight shipments originating in Brazil to Canada will increase.” Read the announcement for more details.
  • 🎄⛽️ LaserShip
    • 🎄 The LaserShip Peak Residential Surcharge was announced and will run from October 30, 2021 through January 14, 2022. In a given weekly invoice period, the cost per package will be based on the percentage volume increase over the baseline amount, which is considered to be the volume from June 2021 (May 29 through June 25). Read the announcement for more details.
    • ⛽️ On September 1, 2021, LaserShip increased their fuel surcharge index by 0.75% at every threshold level.
  • 🎄 OnTrac
    • OnTrac has announced Peak Season surcharges. The Peak Season Large Package, Additional Handling, and Unauthorized Package surcharges are effective from October 3, 2021 to January 15, 2022. A Peak Season surcharge for DirectPost begins on October 31, 2021 and runs through January 15, 2022. OnTrac is also implementing a volume-based surcharge that applies to both commercial and residential packages and runs from October 31, 2021 to January 15, 2022. Read the announcement for more details.
  • 🎄 Purolator
    • Purolator has announced their Peak Season surcharges. A Peak Additional Handling, Peak Oversized, Peak Residential Heavyweight, Peak Large Package, and Peak Over Maximum Limit will be effective from October 4, 2021 through January 16, 2022. A Peak Residential Area surcharge will be effective from November 15, 2021 through January 16, 2022. Read the announcement for more details.
  • 🎄 UPS Canada
    • Peak Surcharges were announced by UPS Canada recently. Peak surcharges include Additional Handling, Large Package, and Over Maximum Limits. The Peak Period for those surcharges runs from October 3, 2021 to January 15, 2022. A Peak Surcharge will also apply to Residential packages, with that Peak Period running from October 31, 2021 to January 15, 2022. The Peak Surcharge on Residential packages is based on volume and applies to all Canada domestic services. Read the announcement for more details.

LTL CARRIER NEWS

  • From FreightWaves: Saia celebrates record YOY growth, Industrial economy growing, too.
    • Saia “saw tonnage increase 12.6% year-over-year in July (shipments +3.4%, weight per shipment +9%) and 9.9% in August (shipments +1.9%, weight per shipment +7.9%). The increases compare to a 2.7% tonnage decline in July 2020 followed by a 0.5% increase in August as parts of the economy were still coming back online… [They] reported record results during the second quarter with tonnage climbing 23% year-over-year and revenue per hundredweight up 6% excluding fuel surcharges.”
    • Saia has already added two new terminals this year, but future plans based on growth data include:
      • 🆕 Opening seven service centers within the year.
      • 📈 Adding 10-15 new terminals a year given favorable market conditions.
    • “Demand throughout the trucking sector remains high and the LTL carriers have seen freight pour in from multiple directions. The mode is experiencing a surge in e-commerce-related parcel shipments as more consumers buy from home. Also, heavier spillover freight that would normally move via full truckload but can’t because of capacity constraints is flooding into LTL networks.”
    • ⚙️ August Manufacturing Purchasing Index: +40 basis points (59.9%).
  • From FreightWaves: ArcBest prioritizes LTL shipments, results in August tonnage dip
    • Asset-based revenue up 25% and 16% in first 2 months of Q3
    • “The company’s asset-based segment, which includes less-than-truckload, saw tonnage decline 4% year-over-year during August, a turnaround from the 5% increase recorded during July.”
    • “The year-ago period (+3.7%) benefited from an unseasonal lift in the company’s moving and storage segment as well as more spot market shipments. ArcBest (NASDAQ: ARCB) is in the process of lowering its exposure to non-LTL shipments to better serve its core customers.”
    • Filing quote: “The year-over-year and sequential decrease in total average daily tonnage and shipments was associated with the deliberate moderation of the number of U-Pack household goods shipments and other spot-quoted shipments in order to serve core LTL customers.”
  • In Q&A interview with Logistics Management, Senior VP of Operations at Old Dominion Freight Line, Dave Bates, says freight economy is experience a big boom. 💥
    • Direct quote: “I would start out by saying there is a big-time boom, in terms of a real strong freight economy right now. This is my 35th year of being in LTL trucking, and I have never seen anything like this before.”
  • From FreightWaves: XPO no longer accepting “inbound LTL shipments on one of its lanes in Albany, N.Y. and destined for Amazon.com Inc. warehouses.”
    • Amazon shipments have a history of holding LTL carriers up in all the wrong ways – whether they’re taking up too much trailer capacity or simply taking too long (days) to unload, XPO’s move may indicate some serious Amazon burnout. 😵‍💫
    • Exactly how a carrier like XPO will be compensated for Amazon-related delays can vary, but may also never occur depending on party table negotiations.


 Written by Cam Elliott


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