2024 Peak Season Surcharges: What Parcel Shippers Need to Know Now

Every year, the eCommerce holiday surge hits and major parcel carriers adjust their networks to handle the increased shipping demand. To absorb those costs, carriers are now applying “Peak” or “Demand” surcharges. These seasonal rate hikes mean that it’s going to cost shippers a lot more to send packages at the end of the year. For many businesses, these additional fees are a significant cost factor, and without careful planning, they can quickly erode margins.

This year, the pattern is no different. On July 15, 2024, UPS announced its latest round of Demand surcharges, and FedEx followed suit on August 15. Carriers explain that these charges help them gear up to continue to deliver “the best possible service” to their customers. For retail shippers, the implications are clear: understanding these surcharges and finding ways to mitigate their impact isn’t just a seasonal task—it’s a year-round necessity given the myriad of other surcharges and complex rating structures they have to manage. And while the problem might seem insurmountable, a proactive approach—particularly with a modern parcel TMS solution—can make a substantial difference in managing margins over time.

Overview of 2024 Peak Season Surcharges

Here’s a look at each carrier’s 2024 peak season surcharges and what they mean for your bottom line.

UPS Peak Surcharges

Peak Surcharge Period: Sept. 29, 2024 – Jan. 18, 2025

For UPS, peak season means added fees across a range of services and fees. This year, residential, Air, Ground, and SurePost shipments are all impacted, and the surcharges show significant jumps, particularly for oversized and additional-handling packages. Here’s a closer look:

• Residential and SurePost Deliveries: Ground surcharges have increased by 8.0% (from $5.65 to $6.10) and Air surcharges by 5.6% (from $6.20 to $6.55). These surcharges apply regardless of volume, impacting all residential shipments.
• Additional Handling: Deliveries to residential and remote areas incur additional surcharges due to the increased effort and mileage required. These charges can add up quickly, making it essential for retail shippers to anticipate and account for these costs by utilizing available tools that can accurately identify residential and remote delivery areas.
• Oversize and Large Package Surcharge: An increased surcharge of up to $500 per package for shipments that exceed size or weight limits during peak season.
• Domestic and International Shipping: Ground, Air, and international services each include peak season surcharges, meaning cross-border shipments may need extra budget consideration.

With these surcharges, businesses relying on UPS should review shipping schedules and consider adjustments, especially for heavier or larger packages where fees are the highest.

FedEx Peak Surcharges

Peak Surcharge Period: Sept. 30, 2024 – Jan. 19, 2025

FedEx has also announced a phased approach for its peak season surcharges, adding a new per-package “demand surcharge” that affects all residential deliveries.

• Residential Delivery Surcharge: This surcharge ranges from 5.6% to 28.6%, depending on factors like destination and weight.
• Additional Handling and Oversized Charges: Additional handling fees apply to oversized and high-weight packages. The surcharges range from $84.50 to $100 for each package that exceeds FedEx’s standard size limits.
• FedEx Express and Air Services: Both Express and expedited services will carry additional peak fees, impacting businesses promising rapid deliveries.
• International Shipping: Cross-border shipments also see an uptick in surcharges, affecting rates for packages shipped to global customers.

Businesses shipping with FedEx need to evaluate packaging and delivery zones, as fees vary based on both. Reviewing surcharge schedules can help mitigate unexpected costs, especially when shipping high-volume, oversized items.

USPS Peak Surcharges

Peak Surcharge Period: Oct. 6, 2024 – Jan. 19, 2025

The United States Postal Service (USPS) used to be a surcharge-lite environment. Not anymore. USPS is widely used for domestic residential shipping, and its 2024 peak season surcharges, though smaller than private carriers’, affect key services:

• Priority Mail and First-Class Packages: Surcharges range from $0.30 to $7.00, depending on weight and zone.
• Parcel Select and Retail Ground: Additional fees apply to these heavier, non-urgent shipping options, often used for bulkier goods.
• International Services: USPS’s international shipments also carry peak season surcharges, adding to the costs of cross-border e-commerce.

Businesses relying on USPS should take these added costs into account, particularly when offering free or discounted shipping.

DHL Peak Surcharges

Peak Surcharge Period: Oct. 27, 2024 – Jan. 18, 2025

DHL, known for its global logistics capabilities, has implemented peak season surcharges that affect both domestic and international shipments:

• Parcel Ground & Expedited Services: New surcharges of $0.25 per package for Zones 1-8 and $0.35 per package for Zones 11-13.
• DHL Express and Expedited Services: Added fees apply for expedited and international services, impacting businesses that offer quick international deliveries.
• Oversized and Overweight Packages: Extra costs apply to shipments that exceed weight and dimension limits.

For businesses shipping with DHL, careful attention to packaging and compliance can help avoid these added fees, keeping international shipping costs in check.

Long-Term Outlook: The Increasing Permanence of Surcharges

Peak season surcharges are no longer a seasonal inconvenience—they’ve become a year-round reality that major carriers use as a reliable revenue stream. In fact, parcel shipping surcharges have become integral to their pricing strategy, allowing carriers to offset operational costs while capitalizing on peak demand.

Looking ahead, the trend is clear: surcharges are set to continue with no signs of slowing down. For example, UPS recently announced a 5.9% general rate increase for 2025, with certain accessorial fees, including oversized and additional handling charges, jumping between 26.1% and 28.1% compared to last year. Residential surcharges, which reached $5.65 this year, are set to climb even higher, as much as $6.10 expected in 2025.

This new reality means that for businesses dependent on parcel shipping, planning for surcharges cannot be a last-minute, seasonal task. They are here to stay and will likely expand. Taking a reactive approach—addressing surcharges only when they arise during peak periods—is unsustainable. Instead, a proactive strategy is essential. By assessing current costs, tracking surcharge trends, and implementing solutions like a parcel TMS, shippers can build a year-round approach to anticipate, absorb, or potentially avoid these added expenses.

The takeaway? Surcharges are not going away. But with the right tools and foresight, businesses can be more resilient and agile to minimize surcharge impacts and protect their bottom line more effectively.

Take Control of Surcharges with Sendflex’s Parcel TMS

To tackle rising shipping costs and surcharges, Sendflex’s Parcel TMS Platform provides shippers with a proactive, cost-saving approach that extends throughout the entire order-to-invoice process. By integrating high-speed rate calculations, cartonization algorithms, order optimization rules, and cost controls directly into digital storefronts, ERP, and fulfillment systems, Sendflex enables shippers to control shipping costs in real time. Here’s how:

• High-Speed Rate Calculations: Many shippers rely on slow, unreliable carrier rating APIs and often underestimate the impact of post-shipping surcharges. Sendflex’s optimization engine accurately processes 1,000s of rates, transit times, cartonization calculations, and business rules per second, taking all surcharges and fees into account.
• Expanded Delivery Options in Digital Storefronts: Many shippers use rules of thumb or averages to calculate costs during online purchase processes. Sendfex’s speed opens the door to presenting consumers with more delivery options while making smarter, diversified carrier routing decisions that avoid costly surcharges and fees.
• Smart Order Allocation: Omni-channel strategies are based on locating inventory closer to consumers to reduce delivery distances and times in transit. Sendflex helps determine optimal fulfillment origins based on factors like inventory availability, shipping costs, and delivery promises.
• Parcel Optimization Planning: Legacy shipping systems can only process one order at a time, usually at shipping stations when it is too late to enforce cost-effective carrier service selection rules. Sendflex’s powerful optimization engine is designed to apply packing, routing, and customer preference instructions across waves of orders upstream from shipping. Sendflex identifies and is able to avoid unexpected surcharges such as oversize, residential, extended delivery, dimensional weight adjustments, and address corrections.
• Carrier Discount Tier Monitoring: Many customers are afraid of losing primary carrier discounts if they diversify their carrier services network. Sendflex monitors carrier incentive targets and only allows routing to alternative carriers once discount tier levels are achieved, thereby preserving discounts.
• “What if” Scenario Modeling: IT professionals have always had the benefit of “sandboxes” to test new technologies. Sendflex’s simulator offers logistics professionals the same advantage by applying optimization instructions against historical data to measure potential savings on surcharge avoidance and delivery time improvements.

With Sendflex’s Parcel TMS, you’re no longer at the mercy of skyrocketing surcharges and hidden fees. It’s time to take back control of your shipping costs—every single day of the year.

Ready to turn these challenges into opportunities? Explore how Sendflex’s advanced tools can transform your shipping strategy and protect your margins. Contact us for a consultation and see the difference a smarter parcel TMS makes.

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