U.S. consumers may not realize it, but the major package delivery providers take advantage of the annual November and December upward spike in package deliveries by making pricing adjustments that add to the cost of those deliveries.
Package delivery mainstays like Federal Express, UPS, and the U.S. Postal Service use the term “peak” to define holiday season price charge upticks. That's basically corporate surcharge speak for saying “Things are busier, we are in demand, and it’s going to cost you more to use our service.”
Related: US Postal Service Loss Shrinks 47% in Fiscal Year to $4.9 Billion
In 2023, however, weaker package delivery trends due to a slowing economy and sliding consumer sentiment may result in the parcel delivery giants actually offering pricing discounts during the peak package delivery season.
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Slowing delivery numbers define most of the story.
The package transport data analyst firm ShipMatrix estimates that 82 million parcels per day will be shipped during the peak U.S. holiday package delivery season. That would be significantly lower than the 90 million per-day parcels delivered during the 2022 peak holiday season.
Compare that to the 31 million daily parcels shipped by Fed Ex and UPS in non-holiday peak periods.
Package delivery fees lower
Given that early signs from manufacturers are seeing fewer orders and transport ships are carrying fewer goods, the major package delivery companies are getting ahead of the problem by reportedly lowering fees, according to The Wall Street Journal.
Some companies that regularly deliver large orders to consumer and business customers are seeing parcel shipping discounts of between 10% and 40% right now.
While UPS and FedEx haven’t formally said they’re cutting package delivery rates, customers are also hearing from delivery company sales representatives that discounts are in play in the last quarter of 2023 and that withdrawn package delivery request penalties are being waived, too.
It's no surprise the major parcel delivery companies are willing to play ball with customers, especially as merging competition rises from Amazon Shipping Uber, DHL, OnTrac, and the U.S. Postal Service. The USPS has already curbed delivery rates for the upcoming holiday season. Now, USPS parcel consumers are seeing holiday surcharges waived, which should save consumers up to $6.50 per package in late 2023.
“There will also be no additional fees for residential area delivery, for Saturday delivery, or for minimum volumes,” the USPS said in a statement. “USPS will continue to be the most affordable way to mail and ship this holiday season.”
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