5 Costly Shipping Charges and How to Avoid Them

May 31, 2019
Author: Caroline McManus
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If shipping costs are making you feel like a sourpuss, we have a solution! We advise all our shippers, small and large, to audit their shipping invoices regularly. It’s important because these invoices show not just the shipping rate but any additional carrier charges on your bill. These additional charges are often fees and surcharges for additional handling, oversized packages, address correction, and more.

Today we are taking a closer look at some of the different surcharges that may show up on your bill, what they mean and how your business can avoid them in the future.

1. Address Correction

A misspelled address or a missing unit number is minor but if you ship with the UPS® and FedEx® the charge for this omission can add up. The fee for a UPS address correction is $16.40 per packages and $16 for FedEx.

  • UPS Address Correction: $16.40
  • FedEx Address Correction: $16.00

The best way to avoid address charges is to double-check your addresses, and if possible, use shipping software that automatically checks and corrects addresses for you.

If you are an e-commerce company shipping many times a day, you might want to invest in data quality software. This is because 8% of businesses and 12% of residences move each year! Without a system or solution to update these addresses, you could be spending a lot of time and effort on packages that are undeliverable or need correction.

 

2. Additional Handling

Both UPS and FedEx apply an additional handling surcharge when a package requires “special handling.” This sounds a bit vague but we can break it down. A package gets an Additional Handling surcharge if: 

  • It weighs more than 70 lbs.
  • Its longest side is over 48 in.
  • Its second-longest side is over 30 in.
  • It is not fully encased in cardboard

If you must send packages that exceed the weight and length limits set by the UPS and FedEx, contact your carrier. Your carrier representative may be able to negotiate a lower Additional Handling Fee or find another service or method of delivery option. 

  • UPS Additional Handling: $14.25
  • FedEx Additional Handling: $13.50
 

3. Residential Delivery Charge

If you are shipping to a non-commercial address, such as houses, apartments or condos, you will probably get a residential delivery charge added to your bill. This is because it is more difficult and time-consuming to deliver to individual residences.

  • UPS Residential Delivery Charge: $5.00
  • FedEx Residential Delivery Charge: $4.40

This is a tough charge to avoid, however being informed is its own weapon. Budget this charge into your calculations so you have a better idea of what your shipping bill will be.

 

4. Delivery Area Surcharge

This is often in addition to the Residential Delivery Charge and it is for what the carrier deems a “rural” area. These less populated areas are more difficult and time-consuming to deliver to, and that shows up on your bill.

Each carrier defines what “rural” means to them and which zip codes are subject to delivery area surcharges. You can find the zip codes for the UPS and FedEx online.

  • UPS Delivery Area Surcharge: $3.80
  • FedEx Delivery Area Surcharge: $4.20

If you ship to one particular "rural" area often you can explore regional carrier options or the USPS service options. USPS Priority Mail and Parcel Select both have tracking, so you have visibility to your packages and will often deliver them for less than the major carriers.  

 

5. Oversize Package Charge

If you are shipping large parcels you should be aware of how the major carriers classify "oversized" packages. Large or oversized packages are considered packages that have: 

  • length plus girth (2 x width)+(2 x height) combined is greater than 130 increase 
  • length is longer than 96 inches

Be sure that you are aware when you are shipping an oversized package and know what the size limitations are. The charge for oversize packages is significant so even having it happen once may be too many times. 

  • UPS Oversize Package Charge: $95
  • FedEx Oversize Package Charge: $90

If you are shipping something that is classified as "oversized" contact your carrier to see if there are different services available and if they can negotiate a lower fee. Consider looking at freight options as well if you are sending a lot of large items. 

 

Now that we've unpacked these charges, your business can make changes to avoid them on your next bill. If you have a recurring problem with a particular surcharge, contact your carrier representative to see how they can help. Shipping with multiple carriers can help you get the best rate and also negotiate more effectively with your carrier representative. 

If you use NeoShip software for shipping you'll automatically get discounted rates with the USPS and can upload your pre-negotiated UPS and FedEx rates with your NeoShip account. You can also compare carriers and price shop for the best rate and the quickest shipping options. 

 

Comments

July 24, 2019 at 3:04 pm
Barbara Dennis
Great information!
Reply »
July 24, 2019 at 12:13 pm
Elise Taylor
Extremely helpful. Thank you so much
Reply »
June 13, 2019 at 12:39 pm
receptionist
this was very helpful!! thank you!!
Reply »
July 24, 2019 at 12:12 pm
Elise Taylor
Extremely helpful. Thank you so much
Reply »
June 18, 2019 at 10:54 am
Caroline
Thank you for the feedback!
Reply »
June 13, 2019 at 9:30 am
Debbie Patek
With the above added charges, do those just show up on our invoices?
Reply »
June 18, 2019 at 10:54 am
Caroline
Hi Debbie, these charges will show up on your carrier invoice if they have been incurred. For UPS, in particular, I've attached their invoice guide below. https://www.ups.com/media/en/ca/invoiceguide.pdf
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