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UPS announced the imposition of surcharges during peak hours, and Amazon cut storage capacity. How should sellers in the United States respond?

09/05/2022
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UPS announced the imposition of surcharges during peak hours, and Amazon cut storage capacity. How should sellers in the United States respond?

According to the latest news from UPS, from October 30, 2022 to January 14, 2023, UPS will impose peak period surcharges on customers with more than 20,000 package bills after October 2021, Air Residential, Ground Residential and SurePost orders Other services are within the range of charges.

The scope of the surcharge applies to all packages that exceed the benchmark volume by 105% per service per week. The calculation of the benchmark volume depends on the UPS customer's use of the weekly shipping service from June 5 to July 2, 2022 the average number of. If a customer's average weekly shipment volume from September 4th to October 2nd is less than 80% of the shipment volume during the June-July period, UPS will use this volume to calculate the baseline volume. The specific additional fees are as follows:

Peak season surcharges are charged according to the standard fee corresponding to the highest item. For example, if a seller ships 175% of their baseline shipments on Ground Residential services in a given week, then UPS will charge that seller for 175% of their baseline usage for all packages that exceed 105% of their baseline shipments ( i.e., $2).

FedEx and Postal Service have just announced the imposition of peak season surcharges, and Amazon will immediately increase peak delivery fees. Now UPS has also stepped in, resulting in an overall increase in sellers' delivery costs. The good news is that for the first time in two years, the dollar has risen close to 7.0. The strong rise of the US dollar exchange rate has made some cross-border sellers regain their confidence and have expectations for the next peak season.

However, on August 29, some Amazon sellers found that Amazon's warehouse capacity was cut, and some even had 50% of the warehouse capacity cut. Cross-border sellers have guessed that "the peak season has arrived earlier."

In the first half of this year, the orders were flat, and sellers are counting on the peak season of Thanksgiving, Halloween, Christmas and other festivals in the second half of the year to sell a lot of blood, and they are preparing for the peak season. Amazon’s storage capacity cut directly into the aorta of the sellers, disrupting the sellers’ plans all of a sudden. Faced with these ups and downs, how should sellers in the United States respond?

The cut of the storage capacity will greatly affect the sellers' stocking plans. The sellers can find cooperation with overseas warehouses in the United States and deliver the goods to third-party overseas warehouses in the United States. When the promotion comes, they can transfer the goods from the overseas warehouses in the United States at any time according to the order volume. For Amazon warehouse sales, you don't have to worry about Amazon's storage capacity, nor the long time for replenishment from China.

For the rising dollar exchange rate, it is not recommended that sellers flock to the US market. Because the U.S. dollar has fluctuated greatly in recent years, if cross-border sellers invest heavily and stock up in large quantities, in case the U.S. dollar exchange rate falls, they will inevitably suffer heavy losses.

UPS imposes surcharges during peak periods, and sellers can only respond accordingly by saving costs in the logistics headway or directly increasing the price of goods. You can choose the combination of sea freight, air freight and express delivery. It is recommended to ship in multiple batches and small batches to speed up capital and inventory turnover.

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