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UPS to Refrain From Delivery Surcharges for 2019 Peak Season

Zacks Equity Research

In a bid to enhance customer experience, United Parcel Service, Inc. UPS recently announced that it will not levy additional surcharges on U.S. residential deliveries (barring contractual exception) during this year’s peak holiday season.

However, the company will be adding special peak surcharges on packages that are over-maximum, large or require special handling. Packages with abnormal dimensions requiring special handling will be levied with an additional handling surcharge between Nov 24, 2019 and Jan 4, 2020. Moreover, between Oct 1, 2019 and Jan 4, 2020, UPS will enforce a surcharge on packages that are recognized as ‘Large’ under UPS’ Tariff or those that are beyond the company’s accepted network size and weight limits.

It is worth noting that in the past two years when UPS added surcharges on residential packages during the holiday season, its rival FedEx Corporation FDX did not follow suit. This year, UPS is perhaps trying out FedEx’s holiday season strategy. Meanwhile, we are yet to hear from FedEx regarding the peak shipping season surcharges.

Anticipating a large number of deliveries during the peak season, UPS has added 20 747-8 and 767 aircraft as well as updated its processing and delivery facilities. Moreover, as part of a capital investment plan, the company is enhancing its air and ground capacity.

United Parcel Service, Inc. Price

United Parcel Service, Inc. Price

United Parcel Service, Inc. price | United Parcel Service, Inc. Quote

Zacks Rank & Key Picks

UPS carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are GATX Corporation GATX and Delta Air Lines, Inc. DAL. While Delta sports a Zacks Rank #1 (Strong Buy), GATX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of GATX and Delta have gained more than 6% and 16% so far this year, respectively.

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