Small business is taking it on the chin again, this time in the form of an additional accessorial fee imposed on companies that ship boxes that exceed 105 inches in length and girth. Effective January 10 of this year UPS is charging us a minimum of $16 for every box that meets the 105 inch threshold, and other fees will apply to that amount depending on where the box is shipped. These additional fees are also being adopted by FedEx to prevent one carrier from offering rates that would create a surge in customers they couldn’t service.
As if those additional fees aren’t enough, beginning April 21 UPS Additional Handling and Large Package Surcharge rates will differ by zone. That means boxes exceeding 105 inches will cost customers in the Western US approximately $25 more for us to ship large blow molds.
These additional fees can be directly attributed to UPS CEO Carol Tome and her position of extracting the most value for shareholders. We understand that part of a CEO’s responsibility is to generate a return for their investors. Tome’s philosophy is fine if you happen to own UPS stock, but it doesn’t bode well for small businesses that bear the brunt of paying higher fees that eventually end up as better dividends for shareholders. It goes without saying that Christmas Lights Creations isn’t in business to make more money for UPS’ shareholders.
However, Tome’s position is contradictory. During UPS’ Fourth Quarter Earnings Call she discussed a renewed focus on growing small and medium-sized businesses, but also declared she was “OK” with losing some sales. So if your stated goal is growing small business customers, what sense does it make to impose fees that effectively kill their ability to ship large boxes?
Since 2016, Christmas Lights Creations has been among a group of companies that have a contract with UPS. For the most part UPS has done a good job getting our freight picked up and delivered on time and undamaged. But in the four-plus years we have been doing business with them we have seen a 33.7 percent increase on base ground and residential surcharges, and UPS does nothing different today than they did the first day they began moving our freight. And despite what anyone from UPS will tell you, It doesn’t cost them one penny more to move a large box today than it did last week, last month, last year or even 10 years ago. Not one penny.
In other words, UPS is charging us more every year to do the same job they’ve always done. As far as we’re concerned this additional length and girth accessorial fee is nothing more than a money grab to bolster their bottom line. Of course UPS will tell its customers that those costs can be passed along to the consumer, but how many customers will be willing to pay at least $20 more for a product for no other reason than to cover shipping costs?
At the moment we offer free shipping on purchases of $150 or more, but that policy may have to change. That amount may result in us seeing fewer sales, but we would rather have lower revenue as opposed to paying more for shipping products for free.
And by the way, excluding one-time costs, UPS’ profit rose 9.5 percent for 2020 to nearly $7.2 billion.
God knows they need the money.
Thanks for hurting small business UPS.