May 23, 2018 / 5:28 PM / a month ago

UPS hits customers with new fees for oversized packages

SEATTLE (Reuters) - United Parcel Service Inc (UPS.N) will begin charging an extra $150 next month to handle oversized packages and pallets, along with a new charge for packages with mislabeled dimensions, the company said on Wednesday.

FILE PHOTO: A United Parcel Service (UPS) employee unloads packages from the cargo of an airplane at the Regional Air Hub in Rockford, Illinois, December 9, 2014. REUTERS/Jim Young/File Photo

The new fees add to charges UPS announced last year for oversized items and come as the world’s largest package delivery company is investing billions of dollars to expand and automate its U.S. sorting facilities.

UPS and rival FedEx Corp (FDX.N) currently deliver parcels up to 150 pounds (68 kg) to a person’s doorstep. The charges are aimed at discouraging retailers from shipping heavier products that can bog down parcel sorting facilities, the company said.

“It’s not a revenue-generating charge, its something we have increased regularly over time to encourage customers to ship through the UPS Freight network for these over max items,” said UPS spokesman Glenn Zaccara.

From June 4, UPS is hiking per-package surcharges for pallets and packages heavier than 150 pounds from $500 to $650, a $150 increase, according to a May 11 message on its website. UPS is adding a new $1-per-package fee if retailers mislabel a package's dimensions. tinyurl.com/y9we7az9

“They are making it clear to customers that ‘we don’t want this oversized volume, and if you are going to ship it with us we are going to charge you an arm and a leg,’” said John Haber, chief executive officer of Spend Management Experts, a supply chain consultancy.

“The sort facilities and conveyor systems are not equipped to handle packages that weigh 200 pounds. With the growth of e-commerce, retailers are shipping whatever they can and it’s very hard for UPS to manage that,” Haber said.

The rise of e-commerce has forced UPS and FedEx to grapple with increased volumes of massive goods like sofas and televisions that consumers are increasingly buying online.

UPS is working on a strategy to partner with at least one U.S. trucking firm to handle in-home delivery of heavy and bulky products.

Beginning on July 8, UPS is raising the additional handling costs for packages weighing more than 70 pounds to $19 from $12, and to $90 from $80 for large packages delivered to a residential address, the company said in October.

Reporting by Eric M. Johnson in Seattle; Editing by Tom Brown

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