June 20, 2017

DEMAND, MEET SUPPLY: UPS to Add Delivery Surcharges for Black Friday, Christmas Orders.

The surcharges, announced Monday, are a shot across the bow for retailers, including giants such as Wal-Mart Stores Inc. and Macy’s Inc., that have been ramping up their e-commerce businesses as they seek to offset declining foot traffic to shopping centers. It also adds to the costs of Amazon.com Inc. and other online players, which rely on UPS and rival FedEx Corp. to handle a surge in holiday shipments.

The fees will force retailers to decide over the next few months whether to raise shipping prices—something that is difficult to do when online shoppers are reluctant to pay shipping fees—increase the prices of goods or eat the extra costs themselves. Some may seek to avoid the surcharges by spreading holiday deals to other weeks during the season.

In an engineering laboratory near Seattle, an Amazon-branded drone smiles.

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