FedEx and UPS have been implementing dynamic pricing over the past year, and the two delivery giants are now advancing their capabilities beyond tacking on surcharges during high-demand periods.
FedEx, for example, used a dynamic pricing program to help bring in $150 million in profit from home delivery fees during peak season. Its surcharges adjusted weekly based on how much more volume customers shipped versus earlier in the year.
UPS, meanwhile, is progressing toward dynamic pricing after the launch of Deal Manager last year. The digital platform aims to make it easier for small and medium-sized businesses to reach shipping deals with UPS, rather than going through a manual pricing process.
The next step in carriers’ dynamic pricing journey could have a variable charge based on the street or ZIP code the carrier is delivering in.