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Dive Brief:
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UPS is implementing a surcharge on U.S.-to-Canada shipments for several services starting May 18, four days before a potential Canada Post strike could disrupt the parcel delivery market.
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The Surge Fee price varies by service, with a $0.49 per-package surcharge for UPS Standard shipments to Canada, per an announcement. UPS Worldwide Economy will see a $1.25 per-pound fee, and the carrier’s Worldwide Express, Saver, Express Plus, Expedited and Express Freight offerings will have a $0.49 per-pound charge.
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The fee will stay in place until further notice as the carrier looks to maintain service quality and timeliness, according to the announcement. UPS' fuel surcharge applies to these added levies.
Dive Insight:
UPS' latest Surge Fee will draw in added revenue on some of the carrier's deliveries during a potentially resource-intensive period for one of its shipping lanes. The delivery giant and other carriers could see an uptick in U.S.-to-Canada demand if union employees at Canada Post begin striking on May 22.
The government-owned carrier and the Canadian Union of Postal Workers resumed contract negotiations in late April after a prolonged halt to talks. The union said in a May 2 update that the two sides will continue to hold mediated discussions over the next two weeks as they work to finalize new agreements.
Many direct-to-consumer shippers rely on Canada Post as a low-cost shipping option with coverage across the country. A prolonged work stoppage would push them to find alternative options.
However, experts told Supply Chain Dive earlier this year that many carriers will be reluctant to open their networks to Canada Post shippers during a strike. Instead, carriers will focus on reliably delivering for existing customers.
While UPS didn't respond to a request for comment on strike contingency plans, an emailed statement from FedEx backed this approach.
"Anticipating that the circumstances at Canada Post may trigger an increase in demand for FedEx services, FedEx has a comprehensive contingency plan to manage and maintain the excellent service our customers have come to expect from us every day," the company said.
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