Subscribe to Breaking News emails

You have successfully subscribed to the Breaking News email.

Subscribe today to be the first to to know about breaking news and special reports.

UPS Adds Nearly $1 Fee For Black Friday and Christmas Deliveries

 / Updated  / Source: Reuters
United Parcel Service aircraft are loaded with air containers full of packages in Louisville, Kentucky. REUTERS/John Sommers IIREUTERS

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

United Parcel Service Inc said on Monday it will levy surcharges on U.S. residential packages during its crucial peak holiday season this year as it seeks to combat the spiraling costs of delivering e-commerce packages.

Like its main rival FedEx Corp, UPS has struggled with the expense of "the last mile" associated with delivering to residential addresses. The cost per package to businesses is typically lower because they receive more deliveries.

Atlanta-based UPS, the world's largest shipping company, said residential packages, large packages and those exceeding system weight limits would face surcharges of up to 97 cents for two-day air services to residential addresses from Dec. 17-23.

A 27 cent surcharge per package will apply to UPS' ground service from Nov. 19 to Dec. 2 and between Dec. 17 and Dec. 23.

"We're focused on helping our customers achieve success during some of their most important selling seasons," Alan Gershenhorn, UPS' chief commercial officer, said in a statement.

UPS's average daily volume exceeded 30 million packages on some days during its 2016 peak holiday season, far above its normal daily average of more than 19 million packages.

To meet that demand, UPS said it "acquires on a temporary basis and often at shorter-term premium rates, additional air and truck cargo capacity, temporary facilities, and additional sorting and delivery personnel."

UPS has worked closely with retailers to manage the peak season surge since struggling to do so in 2013 and 2014.

Both UPS and FedEx have spent billions of dollars in upgrading their networks to handle rapidly rising e-commerce package volumes, leaving investors chafing over the expense.

It is unclear whether Memphis-based FedEx, which is due to report quarterly results after the close of trading on Tuesday, plans to adopt a similar peak season surcharge policy.

Cutting delivery costs is a key priority in the e-commerce sector and was, according to industry experts, one of the reasons for Amazon Inc's announcement last week that it was buying Whole Foods Market Inc for $13.7 billion.

UPS shares were down 6 cents at $110.53 in late morning trading on Monday. FedEx was down 74 cents at $209.76 a share.

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
MORE FROM news

Have feedback?

How likely are you to recommend nbcnews.com to a friend or colleague?

0 = Very unlikely
10 = Very likely
Please select answer

Is your feedback about:

Please select answer

Leave your email if you’d like us to respond. (Optional)

Please enter a valid email address

Thank you!

Your feedback has been sent out. Please enjoy more of our content.

We appreciate your help making nbcnews.com a better place.