Demystifying Peak Season Parcel Surcharges — How Does It Affect Your Business?

Every holiday season, major parcel carriers and courier services add surcharges to cover the increased volume of packages they must deliver through the final quarter of the year. Not surprisingly, this year’s surcharges are larger and broader than ever before.

In fact, 2020 may go down as the largest “peak season” in history, given the e-commerce boom that happened from the coronavirus pandemic, which shifted sales to e-commerce and away from in-person shopping. FedEx and UPS both saw 20 percent increases in packing volume through May, while USPS was hit with a massive 50 percent increase in packages they delivered through June.

As a result, the United States Postal Service has been embattled for months with late and lost deliveries, unable to keep up with the newfound demand. Because the agency has been so maxed out, they added their own peak season surcharges to deliveries for the first time in history.

Switching to the leading parcel companies may save you from the potential of late or lost packages — but the peak season surcharges will affect companies of all sizes.

Each carrier has specific criteria by which they assess and apply surcharges, but there are packaging strategies that can be deployed to lower fees regardless of which service you’re using.
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