UPS to add holiday-season surcharges on US packages this year

United Parcel Service (UPS) will add holiday-season surcharges on US packages this year, the package-delivery company said in a statement yesterday. A 27 cents fee will be levied on package deliveries by the residential ground network of the company, on certain weeks in November and December, UPS said.

Parcels sent to homes using next-day air will be charged an additional 81 cents in the week ending 23 December, while shipments through the deferred network will be levied a per-package fee of 97 cents.

According to UPS, the new charges were needed to help pay for additional holiday capacity in airplanes and trucks bought at short-term premium rates, as also to offset the cost of temporary facilities and seasonal help.

UPS collected an average $7.97 a package shipped through its US ground-delivery division last year. The 27 cent surcharge on each item represented an increase of about 3.4 per cent.

''With the new peak charge, per-package costs for many shipments will only marginally increase during this very busy time of the year,'' chief commercial officer Alan Gershenhorn said.

Under the plans, retailers will be charged extra fees for package deliveries during the busiest weeks before Christmas, posing a new challenge for an industry already coping with a shift away from traditional stores, according to commentators.

The surcharges, announced yesterday, would hurt retailers, including giants such as Wal-Mart Stores Inc and Macy's Inc that had been ramping up their e-commerce businesses in a bid to offset falling foot traffic to shopping centers. It also added to the costs of Amazon.com Inc and other online players, which relied on UPS and rival FedEx Corp to handle a surge in holiday shipments.

According to commentators, the fee would force retailers to decide over the next few months, whether to increase shipping prices, something that was difficult to do when online s