Investor Alert

Aug. 7, 2020, 11:57 a.m. EDT

UPS plans big holiday fees amid coronavirus-related shipment surge

New surcharges for big customers could reach $3 a package for ground shipments, $4 for air, as pandemic boosts online shopping

By Paul Ziobro

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United Parcel Service Inc. plans to impose hefty fees on large shippers during the holiday season, reflecting the added complexity and cost of an expected crush of online orders amid the coronavirus pandemic.

The fees will test the ability of large retailers such as Amazon.com Inc. (NAS:AMZN)  and Target Corp. (NYS:TGT)  to offset costs during a holiday season when they will likely be more reliant on online orders, with shoppers skittish about crowded stores.

UPS (NYS:UPS)  on Friday said the fees could total as much as $3 a package for ground shipments and other lower-priced shipping options and up to $4 a package for air shipments bound for residences.

That is significantly higher than the last time UPS instituted additional fees during a peak holiday season, in 2018. Surcharges then reached 28 cents on ground shipments and up to 99 cents for some air shipments.

The newly planned fees come as UPS as well as rival FedEx Corp. (NYS:FDX)  try to offset significantly higher costs from the influx of packages flowing through their network.

An expanded version of this report appears at WSJ.com.

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