• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI

2

Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living

3

Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs

1

Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI

2

Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living

3

Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs
TechGlobal 500

UPS rates will change for the holidays—but not to Uber-like ‘surge’ pricing

By
David Z. Morris
David Z. Morris
Down Arrow Button Icon
By
David Z. Morris
David Z. Morris
Down Arrow Button Icon
September 18, 2015, 10:28 AM ET
A Boeing-747 is unloaded by ground crews during United Parcel Service Inc. (UPS) Worldport overnight shipping operations at Louisville International Airport in Louisville, Kentucky.
A Boeing-747 is unloaded by ground crews during United Parcel Service Inc. (UPS) Worldport overnight shipping operations at Louisville International Airport in Louisville, Kentucky.Photograph by Luke Sharrett — Bloomberg via Getty Images
Add Fortune on Google for similar content.

Last January, following two years of struggling with booming holiday ecommerce, express shipper UPS announced that it would implement surge pricing during the holiday season. Analysts and press speculated this could mean something Uber-like, with shipping prices changing day to day or even hour to hour. In mid-August, the UPS rate guide confirmed that “holiday season changes” would impact pricing for many of its services.

But despite early speculation, those changes are unlikely to mimic Uber’s transparent and dynamic pricing. Instead, a UPS spokesperson said changes will be centered on deals with larger customers, who will “establish forecasts, promotions, and thresholds” in cooperation with UPS (UPS). Individuals doing their online holiday shopping are unlikely to notice price swings.

It’s unclear whether UPS itself originally floated the idea of Uber-like pricing for shipping, or if commentators (such as Bloomberg’s impassioned Matt Miller) just got carried away. Surge pricing for holiday shipping does make a lot of sense—ecommerce now creates huge shipping spikes on days like “Cyber Monday” (which this year falls on November 30th) and immediately before Christmas. Expanding to deal with those spikes in 2014 made a big dent in UPS’s profits, and surge pricing could motivate retailers and shoppers to spread the load out, making staffing simpler.

But technological and competitive hurdles mean that true surge pricing for shipping could be a long way off.

Case in point—in an earnings call Wednesday morning, UPS rival FedEx (FDX) definitively signaled that it will not implement new pricing structures for the upcoming holiday season, despite speculation early this year that competitors would follow any move by UPS.

“I’m proud to report that we are not slowing or adjusting our service commitments heading into peak,” said CEO Mike Glenn. “We have been closely collaborating with our customers all year to understand their peak shipping needs, and we stand ready to deliver.”

If competing carriers don’t implement price changes in unison, consumers and many online retailers can easily dodge any surge—thanks, ironically, to technology. The ecommerce servicer Brandshop, like many midsized shippers, can instantly and automatically comparison shop:

“A box is placed on a scale, and the scale registers the weight into our software program,” says COO Aaron Turner, describing Brandshop’s back-end process. “Then we send that behind the scenes to an API call to our technology stack. We’ll go and filter all the options we have . . . and it’ll return back the cheapest. And that’s what [shipping] label prints out.”

That’s a radically different scenario from Uber’s, which involves limited competition, and whose customers are somewhat locked into a closed app environment.

MORE: Uber CEO has no plans to kill off FedEx and UPS

Even if FedEx and UPS did adopt a surge model together, they’d still likely be undercut by the U.S. Postal Service, whose rates are set through the Postal Regulatory Commission, and mostly limited to inflation adjustment (in fact, the PRC recently ruled that USPS will have to roll back a temporary price increase). USPS has considerable capacity to catch competitive overflow.

There are also major technological hurdles to a surge shipping system that could communicate changing shipping prices to retailers and consumers. Jarrett Streebin, CEO of shipping technology firm EasyPost, says that the APIs most carriers use to interface with online retailers’ checkout systems are still primitive, and inadequate for even semi-dynamic pricing.

“I can’t even imagine them implementing it,” says Streebin, “Given what I know about their technology.”

Uber itself has debuted meal delivery and courier services in some major markets, but recently said it has no plans to compete in larger-scale logistics. The same capital intensity and big contracts that make dynamic pricing less practical for UPS and FedEx probably played into Uber’s conclusion that long-distance shipping isn’t a fit for them.

UPS does say it will ding its largest customers if they exceed negotiated volume limits, which could have been what they meant by “surge pricing” all along. But that has little in common with Uber, and isn’t a change over previous policies. Affected online retailers could choose to communicate those surcharges to consumers somehow, but they’ll have to decide soon—most ecommerce sites lock their code in October, to eliminate the possibility of holiday technical foulups.

Most likely, then, shoppers won’t see shipping costs directly enough to impact their buying behavior—we’ll all still be scrambling on December 22nd to order that pair of socks for our second cousins, and carriers will still have to deal with the same crush.

Sign up for Data Sheet, Fortune’s daily newsletter about the business of technology.

For more Fortune coverage of ecommerce shipping, watch this video:

About the Author
By David Z. Morris
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

After a nearly 800% explosion, this AI stock’s U.S. debut could signal if the market can still boom—or is headed for a bust
AItech stocks
After a nearly 800% explosion, this AI stock’s U.S. debut could signal if the market can still boom—or is headed for a bust
By Jason MaJuly 5, 2026
7 hours ago
Meet Atlas, the humanoid robot that delivered the game ball.
InnovationSports
Meet the soccer-playing humanoid robot that just delivered the game ball at the Brazil v. Norway FIFA World Cup match
By Catherina GioinoJuly 5, 2026
9 hours ago
Alibaba gets reprieve on lobbying ban tied to DoD blacklist
LawChina
Alibaba gets reprieve on lobbying ban tied to DoD blacklist
By Kate O'Keeffe and BloombergJuly 5, 2026
9 hours ago
The stock market is about to suffer a ‘snapback’ and will lose much of this year’s gains as ‘speculation is hitting extreme levels,’ BofA warns
InvestingS&P 500
The stock market is about to suffer a ‘snapback’ and will lose much of this year’s gains as ‘speculation is hitting extreme levels,’ BofA warns
By Jason MaJuly 5, 2026
10 hours ago
Nvidia supplier Hon Hai’s sales beat on continued AI demand
AsiaServers
Nvidia supplier Hon Hai’s sales beat on continued AI demand
By Debby Wu and BloombergJuly 5, 2026
12 hours ago
SK Hynix seeks access to AI investors in $29 billion U.S. listing
InvestingChips
SK Hynix seeks access to AI investors in $29 billion U.S. listing
By Bailey Lipschultz, Jeran Wittenstein, Yiqin Shen and BloombergJuly 5, 2026
12 hours ago

Most Popular

Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI
AI
Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI
By Marco Quiroz-GutierrezJuly 5, 2026
16 hours ago
Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living
Success
Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living
By Preston ForeJuly 4, 2026
2 days ago
Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs
Law
Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs
By Wyatte Grantham-Philips and The Associated PressJuly 2, 2026
3 days ago
The stock market is about to suffer a 'snapback' and will lose much of this year's gains as 'speculation is hitting extreme levels,' BofA warns
Investing
The stock market is about to suffer a 'snapback' and will lose much of this year's gains as 'speculation is hitting extreme levels,' BofA warns
By Jason MaJuly 5, 2026
10 hours ago
Meet the Zillennials: The luckiest micro-generation in the workforce, born between 1993 and 1998
AI
Meet the Zillennials: The luckiest micro-generation in the workforce, born between 1993 and 1998
By Nick LichtenbergJuly 3, 2026
3 days ago
Mark Zuckerberg takes business calls on a jet ski wearing his $800 Meta glasses—and insists 'the other person could not tell'
Big Tech
Mark Zuckerberg takes business calls on a jet ski wearing his $800 Meta glasses—and insists 'the other person could not tell'
By Sydney LakeJuly 5, 2026
18 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.