Shipping technology specialist Pitney Bowes Inc. has announced price hikes for its domestic and cross-border delivery and returns services for the peak holiday shipping season, joining UPS Inc., FedEx Corp., and the U.S. Postal Service in a move that will increase the pressure on shippers to pass those higher charges along to consumers.
A spike in e-commerce driven by work-from-home policies during the pandemic is driving the change, the Stamford, Connecticut-based firm said. While that expansion of e-commerce has been fruitful for online commerce, it has also created challenges as shipping costs are rising ahead of what is expected to be the largest online holiday shopping season in history, Pitney Bowes said.
“Our clients rely on Pitney Bowes to help anticipate and manage their logistics costs. We don’t take that responsibility lightly and the challenges of the pandemic have not altered our approach to simple and transparent pricing,” Gregg Zegras, executive vice president and president of global e-commerce at Pitney Bowes, said in a release. “We have worked directly with our clients to review and revise volume projections and examine the realities of our market. Based on that analysis we are introducing a simple, reasonable, and temporary peak rate adjustment not to exceed $1.50 per parcel across all of our e-commerce delivery and returns services.”
According to Pitney Bowes, its flat-rate hike will be easier to understand than recent peak season surcharges announced by other major carriers, which “puts e-commerce merchants and shippers in the untenable position of not being able to forecast growing costs during this most critical time of year.”
However, the industry analyst firm Spend Management Experts said regardless of how clear or murky the charges may be, many retailers will be forced to pass some of them down to consumers. That is especially true because the majority of package volumes have dramatically shifted from bulk retail shipments to more expensive residential parcels this year because of Covid-19, and they continue to remain elevated, according to a blog post by John Haber, CEO of Spend Management Experts.
In response, retailers will have to adapt quickly or face bankruptcy. According to Haber, 2020 will likely see a record number of bankruptcies as the retail industry continues to adapt to a changed environment that favors e-commerce. “The companies that are going to be hurt by these surcharges are the companies that can least afford it at this point, and that’s retailers,” Haber said.