UPS Targets Discount Sharing With New Fee on Retailers
17 Octobre 2015 - 1:16AM
Dow Jones News
By Laura Stevens And Greg Bensinger
United Parcel Service Inc.'s new round of rate increases
includes a fee to help make up for cybershopping sites and box-box
retailers' sharing of generous shipping discounts with vendors.
The Atlanta shipping company announced sweeping rate increases
on Thursday, including the second boost this year to its fuel
surcharge and a near-doubling--to $110 from $57.50--of the fee to
deliver oversize items, such as mattresses and patio furniture.
Those changes will kick in Nov. 2, just in time for the holidays,
in a partial remedy for the past two years when UPS overspent as
shoppers turned online to order.
In addition, UPS said that beginning next year it would start
charging for third-party billing. The move is aimed at reining in
the practice among many online marketplaces that allow merchants
who sell goods through their sites to use their UPS discounts by
printing shipping labels straight from their accounts.
"The number of transactions that are going online for
third-party arranged shipments has increased to the point where
it's appropriate for us to establish a fee," a UPS spokesman said.
The new third-party surcharge of 2.5% of the total price of a
package helps assure UPS is properly compensated for its services,
he added.
This new fee also will affect retailers that allow vendors to
use the discounts to ship directly to consumers--skipping the
middleman--or direct goods to their own shelves for restocking.
EBay Inc. won't face the fee, as it has negotiated its own
discount and each of its merchants generally has a separate account
with UPS, an eBay spokeswoman said. Most third-party merchants
likely wouldn't face the new fee on Amazon.com Inc.'s namesake
site, either, according to a person familiar with the matter.
Currently, the biggest retailers get shipping discounts with UPS
and FedEx Corp. of as much as 60% off list rates based on the
volume they ship, according to industry consultants.
That discount typically is given under the assumption that
packages would be consolidated and come in bulk from distribution
centers.
Shipping 100 discounted boxes of shoes via ground from Atlanta
to New York could cost third-party shippers an extra $20 after the
new fee goes into effect.
Both UPS and FedEx are grappling with the challenges of
fast-growing but lower-margin e-commerce. Across the board, rates
and other charges at UPS and FedEx will go up about 5% next
year.
Separately, the U.S. Postal Service on Friday said it would seek
to increase its commercial package prices by an average of 9.5% and
in the double digits for its bread-and-butter business of packages
weighing less than a pound.
USPS is asking its regulators for permission to raise prices a
year after it aggressively slashed prices by as much as 58% on some
Priority Mail packages for customers shipping at least 50,000
parcels a year in an effort to better compete with UPS and
FedEx.
Any price increases for deliveries are likely to be passed along
to consumers--if not in higher shipping costs than with higher
prices at checkout, shipping-industry consultants say.
"At some point some of the charge is going to get pushed back to
the purchaser of the goods," said John Haber, chief executive of
Spend Management Experts.
Fuel surcharges are another way to offset the higher cost of
deliveries. FedEx late last month raised its fuel surcharge index
for the second time this year, citing the increase in residential
deliveries and bigger packages. Both companies' fuel costs were
down about 35% in their most recent quarters.
Fuel-surcharge revenue "has actually declined at a rate faster
than our reduction in actual fuel costs on a year-to-date basis,"
the UPS spokesman said. The company "is making an adjustment to
correct that imbalance."
Write to Laura Stevens at laura.stevens@wsj.com and Greg
Bensinger at greg.bensinger@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 16, 2015 19:01 ET (23:01 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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