Carrier surcharges are additional fees that are applied to the base shipping cost for a package. Each surcharge helps cover the additional costs needed to compensate for extra labor or processing that special packages need.
Below are a few examples of surcharges that you should be aware of as they will change the cost to ship your packages. Some surcharges are more common than others, but as your business grows and you ship more, you will likely come across several. Keeping in mind shipping costs is especially helpful when you are working on pricing products and determining what type of shipping rates you will offer your customer.
Not all carriers have the same surcharges, and for a comprehensive list of surcharges, we recommend that you visit the carrier websites.
Additional Handling Surcharge:
Packages where an additional handling surcharge will be applied are not every day 5–10-pound packages that typically come to mind. These packages are shipped in non-traditional packaging or are very heavy and cannot be processed by the carriers with the standard packages. For example, UPS defines an additional handling surcharge as one applies to packages with these characteristics (non-comprehensive):
- Any domestic package with an actual weight of more than 50 pounds.
- Any international package with an actual weight of more than 70 pounds.
- Any article that is not fully encased in a corrugated cardboard shipping container, including tires.
- Any package with an outer shipping container not made of corrugated cardboard, including but not limited to canvas, leather, metal, wood, hard plastic, soft plastic (e.g., plastic bag) or expanded polystyrene foam (e.g., styrofoam).
- Any package with an outer shipping container covered in shrink wrap or stretch wrap.
- Any package bound with metal, plastic or cloth banding, or that has wheels, casters, handles or straps (including packages where the outer surface area is loosely wrapped or where the contents protrude outside the container surface).
- Any cylindrical-like item, including but not limited to barrels, buckets, cans, drums, mailing tubes or pails.
- Any package routed through UPS’s irregular package sortation process, including but not limited to packages 1 inch or less in height.
Essentially any package that is too large, too heavy, or in a non-corrugated cardboard box could be subject to this surcharge.
Delivery Area Surcharge:
Delivery area surcharges can be applied for a handful of reasons, but particularly when a package requires extra travel to deliver. If a carrier driver must drive to a remote area and spend extra time delivering the package, it will incur a surcharge. FedEx defines a delivery area surcharge as:
- A delivery area surcharge applies to package shipments destined to select U.S. ZIP codes. In addition, a delivery area surcharge applies to FedEx Express and FedEx Ground® shipments destined for areas in Alaska and Hawaii that are remote, sparsely populated, or geographically difficult to access.
Residential Area Surcharge:
When broken down, it is more expensive for carriers to serve residential areas. This is because they are making more stops while delivering smaller-value packages. On the other hand, for commercial deliveries they make one stop in a business park and deliver several high-revenue packages as they tend to be larger and heavier. Therefore, to offset the cost of frequent stops and low-revenue shipments, carriers will incur a residential delivery surcharge. UPS defines a residential area surcharge as:
- A surcharge will apply (in addition to all applicable Area Surcharges) to any delivery to a location that is a home, including a business operating out of a home.
Hazardous Material Surcharge:
The carriers want to keep their employees and package recipients safe during the shipping, handling, and delivery process. Therefore, many dangerous substances are not able to be shipped. However, there is a short list of hazardous materials that can be shipped. This does incur a surcharge though as the carriers must take extra precautions and also do additional risk-management and recordkeeping regarding the shipment.
Address Correction Surcharge:
If you don’t know by now, nothing is free. Even though mistakes are made, or plans change and a delivery address must be changed or corrected, this still incurs a fee from the carriers. UPS defines the address correction surcharge as:
- If any shipment has an incorrect or incomplete address, UPS will make reasonable efforts to secure the correct or complete address and will make available to the shipper the correct address. UPS may also correct or complete an address based on information obtained from the shipper or consignee. An Address Correction charge will be assessed to the shipper for an address correction or completion. – An address validated by UPS may be incorrect or incomplete for purposes of completing delivery and may be corrected by UPS.
Oversize Package Surcharge:
Would you rather deliver a large box or a small box? Probably a small box. Carriers have additional surcharges for large boxes due to the additional handling and space that big boxes require. For example, carriers use large sorting facilities to sort and route packages, and packages exceeding certain dimensions have to be specially handled and therefore take more time and space than a traditional package would. FedEx defines an oversized package as:
- An oversize charge applies to packages that exceed 96 inches in length or 130 inches in length and girth.
If you are shipping in very large boxes, if possible, consider breaking the shipment up into smaller boxes. If you ship large items like car parts that cannot be separated into smaller boxes, keep this surcharge in mind when pricing your products.
FedEx Surcharges and Shipping Information
https://www.fedex.com/content/dam/fedex/us-united-states/services/Fees_Shipping_Information.pdf
UPS Surcharges and Shipping Information
https://www.ups.com/assets/resources/webcontent/en_US/retail_rates.pdf
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