UPS Imposes New Penalties for Late-Paying CustomersUnited Parcel Service Inc. has begun charging a 5 percent penalty on customers who pay their bills late.
For any monthly or weekly payment plan, a late-payment fee is charged if the shipper's payment is not received by UPS within 14 days of the invoice due date. The first invoices assessing penalties appeared on weekly invoices dated Jan. 11.
UPS said customers were warned about the changes in notices sent in December. The largest UPS customers that have contracts with the company generally were told they would get a reprieve until early July.
UPS already had late-payment penalties but rarely enforced them, UPS spokeswoman Christine McManus said.
McManus said the late fees are unrelated to lower volumes. The company announced in October that daily U.S. package volume dipped 2.1 percent to 11.7 million for the quarter, which ended Sept. 30. The company announces fourth-quarter numbers at the end of January.
"We just made a business decision to do this at the beginning of the year," she said.
She also said the penalties were timed to take effect about the same time as its Jan. 6 rate increase. Next Day Air rates increased 3.2 percent while the Worldwide Express service's rates rose 2.9 percent. Rates for UPS commercial ground services rose 3.9 percent, and the residential surcharge changed from $1.10 to $1.15.
UPS said these rate increases are consistent with others in recent years.
McManus did not have specific numbers on how many customers pay their bills late, but insiders said it is a general practice.