Shipping Carriers & COVID-19: What You Need To Know

Shippo Snippets:

• Shipping carriers have been regularly issuing updates about changes and modifications to their practices during COVID-19
• Amazon pauses its third-party shipping program, Amazon Shipping, to focus on its own customers
• UPS, FedEx, and TNT announce surcharges on certain deliveries
• Major airlines are using passenger planes to provide mini-freighter services, but there are challenges with this practice
• Carriers have implemented procedures to reduce direct contact, including no longer requiring signatures in most cases

The Story:

Even with the delays and restrictions in light of COVID-19, the various shipping carriers have displayed an amazing amount of agility in providing the essential services we’ve all been relying upon. And as shipping and logistics challenges continue to evolve—along with the increasing need for businesses and stores to refill their warehouses—air transportation is more crucial than ever before.

To join the cause, major airlines are now offering “mini freighter” services to fill the rows and rows of unsold seats. This involves using passenger planes to deliver cargo. On one hand, it sounds like a smart use of resources. But logistically, as one airline consultant points out, this isn’t easy, either “physically or economically.” 

In part, this is because air freight is directional, meaning that more freight may go out than what comes in, or vice versa. Samuel Engel, SVP of Aviation at ICF explains, “What you’re asking is to use half of the plane, largely in one direction, to cover the costs or profit that would have been covered by the whole plane in both directions. That’s a tall ask.”

To compensate, the costs of air freight being transported internationally are going up—and major carriers are responding in turn. As just one example, DHL Express—effective April 1, 2020—added an emergency surcharge on shipments over 2.5KB in weight. 

In related news, to put a strong focus on health and safety, carriers are providing no-contact methods of delivery, including the stoppage of signature requirements in most cases.

Here are a few other key developments, including those from Amazon, UPS, FedEx, and the United States Postal Service.

Amazon Shipping News

As reported last month, Amazon paused its “Fulfilled By Amazon” service of non-essential items from third-party sellers. As of April 13, the company has shared that it will begin to allow third-party sellers back onto its platform to sell and ship some non-essential items. At the same time, it also announced its plan to hire an additional 75,000 workers in addition to the 100,000 it already brought on to help meet the growing demands of its services. 

It has also recently announced that it will put a pin in its Amazon Shipping services of non-Amazon items. Launched in 2018 and piloted in a few cities at the moment, Amazon Shipping has been positioning itself to be in direct competition with the likes of UPS, FedEx and USPS.  It will, however, still ship some of its own packages. Whether this is a permanent move or not remains to be seen. But for now, that’s good news for other carriers. The Amazon Shipping service, will go on hiatus this coming June. 

UPS Shipping News

UPS continues to emphasize their goal to continue meeting shipping needs for businesses and customers in this time of increased air cargo capacity demand. To manage this increase in demand, and the extra costs that go along with it, an emergency peak surcharge was announced on March 24, 2020, one that UPS will temporarily implement for certain international shipments.

This surcharge rate will be charged per kilogram.

Specifics:

• This surcharge will be added onto shipments being sent via UPS Worldwide Express, UPS Worldwide Express Freight, and UPS Worldwide Expedited in certain geographies.
• Initial applicable geographies include shipments that originate from mainland China and the Hong Kong special administrative region (SAR), and are being delivered to the United States, Europe, and America regions. This has since been expanded (see the next paragraph!).
• This surcharge went into effect on April 5, 2020 and will remain in place until further notice.

The temporary peak surcharge rate will fluctuate upon market conditions. On April 7, 2020, UPS announced that they were increasing the amount of this peak surcharge until further notice. This surcharge will also apply to international shipments with more origins and/or destinations, beyond those originally listed, although specific geographies were not yet named. 

This surcharge may or may not affect your business, depending upon where you source items. It may make sense to reevaluate how major carriers are charging for services during this unusual time, to see if you’re using the right one to meet your needs.

And, although UPS remains committed to delivering globally, their UPS service guarantee continues to be suspended for all shipments from any origin or destination throughout the COVID-19 experience. Currently, UPS Next Day Air Saver® and UPS 2nd Day Air A.M.® services will have delivery times extended until the end of day.  

To help reduce contact when you receive packages, you can use a free app, UPS My Choice, where you can direct the driver where to leave them. You can also redirect them to a different address and receive notifications on expected delivery times.

To keep up with how UPS is responding to COVID-19, overall, here is their page.

FedEx Shipping News

Effective April 6, 2020, FedEx is adding a temporary surcharge on FedEx Express deliveries and on TNT international parcel and freight shipments. In their press release, they shared the following points:

• They are delivering packages to places around the world that are under states of emergency and/or with shelter in place restrictions.
• These restrictions are having a disruptive impact on the global supply chain.
• Another challenge is the current limitations on air cargo capacity.

To address these challenges, FedEx Express International Services will charge an additional $0.45 cents when delivering to Asia-Pacific countries. Note that China is not listed as having a surcharge. In other countries, the surcharge is listed at ten cents. Minimum parcel charges start at $1 for each shipment. For freight shipments, the minimum is $50.

TNT International Express Services—a subsidiary of FedEx—will use the same surcharges as FedEx Express, with the same $1 minimum shipment charge. With TNT International Economy Service, the surcharge for delivering to countries in Europe will be five cents.

To help reduce contact, physical signatures are not necessary, except for shipments with adult signatures required, with:

• FedEx Express (U.S. and Canada)
• FedEx Ground (U.S. and Canada)
• FedEx Freight (U.S.)
• FedEx Office in-store (U.S.)
• FedEx Same Day City (U.S.)

Here is their most recent statement on COVID-19.

USPS Shipping News

When carriers deliver items that would typically require a signature, the post office carrier will instead ask for your name and enter it into the signature field of the device being used by the USPS. This is being done for health and safety reasons. This went into effect on March 16, 2020 and will stay in place until further notice. If a delivery is sent to a mail room, the recipient will receive either a text message or telephone call as notification. Note that, if an area or country is closed because of the coronavirus, relevant deliveries will be suspended.

Here is their COVID-19 page.

Visit Shippo for real-time COVID-19 carrier coverage information.