Throwing Down the Gauntlet (aka UPS & Surcharge Pricing)

Speaking of balls, UPS ($UPS) unveiled a new policy this week: surcharge pricing for holiday shipping. This is either brilliant or ridiculously stupid. Brilliant, short-term, because more and more commerce is shifting online and so someone - whether it's the end consumer or the business itself - is going to have to absorb the cost of the increased volume. Prior to a recent uptick, UPS' stock had not performed well of late as it spends to try and revamp ops to handle the shear increase in package volume. This new policy ought to help. On the flip side, we can't help but to think that Jeff Bezos has just injected his shipping team with HGH with a clear directive to figure out a way to cut out the shipping middleman and control their own supply chain. UPS just poked the bear. That typically doesn't end well. Finally, as retailers shift to e-commerce this policy will hurt their bottom lines at a critical time. Perhaps they'll take a page out of Amazon's book and offer incentives to encourage order-online-pickup-in-store initiatives. Maybe an extra few percentage points off? If they have stores. Hence the omni-channel conundrum.