Shipping

In last month's article, "UPS Holiday Preparedness to Cost Merchants Next Season," we reported that UPS planned to introduce new peak holiday shipping rates. The news came as the company warned investors that it had experienced a disappointing fourth quarter and would seek ways to recoup some of the higher costs of meeting peak holiday demand. In its earnings call with analysts on Tuesday, UPS explained how it would try to capture some of those costs, revealing it would implement "peak residential surcharges that are differentiated from our nonpeak time of year on a customer segmented basis."

UPS announced another rate increase for shippers, effective Feb. 2.

For Zappos’ call-center employees, more caller demand means more pay. In September, Zappos CEO Tony Hsieh was wandering the halls of the online retailer's Las Vegas headquarters and noticed that the customer service center's walls were covered — floor to ceiling — with sheets of printer paper. Hsieh had stumbled across the scheduling method for the center's 540 employees, who respond to the 10,000 customer inquiries Zappos receives by phone, email and web chat every day. 

E-commerce giant Amazon.com is upping the ante on its free shipping policy. The company announced that all Amazon seller-fulfilled items are now eligible to contribute to Amazon's minimum order of $35 to qualify for free shipping. Therefore, customers can now get free shipping whether the items are fulfilled by Amazon or from the millions of small and local businesses selling on Amazon. This free shipping expansion more than triples the millions of items eligible to contribute for free shipping, and makes items from small and local businesses offering free shipping even more attractive to customers.

The USPS filed a notice yesterday about its rate plans for Priority Mail, a popular service among online sellers. The filing with the Postal Regulatory Commission included some good news — the Postal Service wants to keep domestic Priority Mail Express and Priority Mail services at their current prices. "It's part of the Postal Service's ongoing pricing strategy to capitalize on strong package growth," according to the agency's announcement. "Priority Mail is the Postal Service's flagship Shipping Services product and is a convenient and fast way to send documents and packages requiring expedited transportation and handling."

The U.S. Postal Service will raise rates in April for some market-dominant services based on a Consumer Price Index (CPI) cap authority of 1.966 percent. If the Postal Regulatory Commission (PRC) approves it, the rate changes will go into effect on April 26. The filing doesn't affect Postal Service Shipping products and services. 

For top U.S. retailers, free delivery is now the norm. That is good news for shoppers, but not so much for investors. During the just-ended holiday season, outlets from Target to Wal-Mart to Amazon expanded their free-delivery options, adding more items eligible for free shipping. They also did away with minimum spending thresholds to qualify for the perk. Yet as

Google is gaining ground in the market for same-day package deliveries, stepping up competition with Amazon.com, eBay and a host of startups during the busy holiday shopping season. The service, called Google Express and available in big U.S. cities, handled 50 percent more toys in the two weeks after the Thanksgiving holiday, the peak of the year-end shopping season.

Not so fast, Amazon.com. Best Buy has raised the stakes in the online shopping wars by offering an eye-popping holiday promotion: free two-day delivery on thousands of items on its website. The deal, which went live over the weekend, is an aggressive move by the electronics retailer to win over holiday shoppers who are especially concerned about shipping speed when making online purchases in the home stretch before Christmas. Best Buy hasn't yet announced an end date for the holiday delivery offer.

In case you haven't heard — although it's likely you have — next year the major parcel freight carriers (i.e., UPS, FedEx) will be shifting from pricing based on package weight to package size. What does this mean for online retailers? The short answer: it's going to cost you more to ship your packages. Upwards of 20 percent more, according to some industry reports.