COLORADO, USA — UPS won't be applying additional surcharges to U.S. residential deliveries this holiday season, but an industry analyst says the company will be offsetting the revenue loss by creating a longer peak season.

United Parcel Service Inc. (NYSE: UPS) is breaking from last year's decision to apply additional costs during its peak winter season to domestic residential deliveries. The Atlanta-based logistics giant credits the move to cost savings from newly created operating efficiency with its expanded air freight network (20 new aircraft in 2018 and 2019) and added capacity from its new Super Hubs, such as the 321-acre facility that opened in Atlanta last October.

“We delivered a record-setting 2018 peak season in terms of both on-time delivery performance and operations execution,” said CEO and Chairman David Abney in a news release. “We will build on the lessons learned last year and leverage our new efficient air and ground capacity to make the 2019 peak season another success for customers, investors and other stakeholders.”

UPS-432346027
A UPS delivery truck.

In 2018, UPS tacked on a 28-cent peak delivery surcharge for ground and an extra 99 cents for air shipments. Rival FedEx Corp. (Nasdaq: FDX), meanwhile, didn't follow suite and neither did USPS, regional carriers or other parcel providers. That created a "cost issue" for using UPS, according to John Haber, a former UPS executive who is founder and CEO of Atlanta-based consulting firm Spend Management Experts.

Read more at the Denver Business Journal

SUGGESTED VIDEOSNext with Kyle Clark