Starting September 15, UPS will impose a surge fee on all U.S. imports originating from China and several other countries, according to a recent notice to shippers. A $0.25 per-pound “Surge Fee” will be applied to shipments from ten countries headed to the U.S., while a $0.50 per-pound charge will be levied on shipments from China, Hong Kong, and Macau. The fee, which is based on a shipment’s billable weight and subject to UPS’ fuel surcharge, has no listed end date and may be adjusted in the future.
Implications of the Surge Fee
The new surcharge aims to ensure UPS is “compensated appropriately for additional costs incurred,” according to spokesperson Brian Hughes. It is also expected to generate more revenue for the company on rapidly growing shipping lanes. Despite a year-over-year decline in UPS’ overall average daily export volume in Q2, Asia exports grew by 1.7%, with export volume on the China-to-U.S. lane increasing by 20.6%.
The surge fee is seen as a way to mitigate the low-yield problem from Asia-based e-commerce marketplaces like Temu and Shein, which provide substantial volume for carriers but are typically less profitable to deliver than healthcare and small business shipments.
The introduction of the “Surge Fee” implies that current agreements with UPS do not include language that reduces the cost of the charge. Experts anticipate that FedEx will announce a similar charge to UPS’ Surge Fee in the coming weeks.
