Shipping Surcharges: An In-Depth Look at Additional Fees from FedEx, UPS, and USPS

Shipping these days is crucial for businesses, but it comes with challenges. One big challenge? Extra charges tagged onto deliveries called “surcharges.” They can make up a big chunk, around 20-40%, of what companies spend on parcel delivery. And guess what? Carriers like UPS and FedEx make a lot of profit from these surcharges. In 2024, even though these carriers are raising their rates by about 5.9%, the surcharges will go up even more.

Shipping costs extend beyond the basics, encompassing additional fees and surcharges from carriers that can significantly impact your overall expenses. Understanding these charges is crucial for informed decision-making regarding your shipping preferences. This guide offers comprehensive insights into ten common surcharges you might encounter while shipping with FedEx, UPS, and USPS.

Before diving in, it’s important to note that carriers like FedEx and UPS often impose supplementary charges beyond the standard shipping costs. These fees can seem complex initially, but delving into them helps predict costs accurately and make informed choices about your shipping methods. This guide aims to shed light on these surcharges, particularly those from FedEx, while acknowledging that UPS levies similar fees.

Address Correction Fee

Both FedEx and UPS apply an Address Correction Fee when rectifying an address for successful package delivery. This fee covers the additional resources needed to amend delivery details. Unlike the others, USPS typically returns packages with incorrect addresses to the sender, thereby avoiding this fee.

Current Fedex Charge (2023): $21 for address correction

New FedEx Charge (2024): $22.50 for an address correction.

At 3PL Center, a great feature of our WMS is our address verification process. We check each address to ensure its accuracy. Sometimes the client may have entered an address missing the apartment number or missed something very easy to overlook. We are also checking to ensure it’s a commercial or residential address. This avoids costly Address Correction fees. 

Additional Handling Surcharge

All three carriersFedEx, UPS, and USPS—impose an Additional Handling Surcharge for packages requiring special handling due to weight, dimensions or packaging.

The breakdown of FedEx’s Additional Handling Surcharge revolves around weight, dimensions, and packaging specifications. It varies based on shipping zones and package characteristics.

UPS’s approach mirrors FedEx’s, factoring in weight, dimensions, and packaging.

FedEx Additional Handling Surcharge

FedEx calculates its Additional Handling Surcharge based on three factors: weight, dimension, and packaging. In 2023, for domestic express and ground services, these rates are zoned-based, varying depending on the shipping zone. Here’s the breakdown:

  • Weight: Packages over 50 pounds (for U.S. Express & Ground Services) or 70 pounds (International Express & Ground Services) incur an extra fee ranging from $29.00 (Zone 2) to $36.00 (Zone 7+).
  • Dimensions: Additional charges apply if a package’s longest side exceeds 48 inches, measures over 30 inches along the second-longest side, or exceeds 105 inches in length and girth. Charges range from $18.50 (Zone 2) to $25.00 (Zone 7+).
  • Packaging: Non-standard packaging incurs fees between $16.50 (Zone 2) to $21.00 (Zone 7+). This includes packages not fully encased in an outer shipping container, unconventional materials, cylindrical shapes, and more.

From January 16, 2023, a Peak Additional Handling Surcharge of $3.45 per package applies during peak times.

UPS Additional Handling Surcharge

UPS follows a similar approach but with specific differences:

  • Weight: Packages over 70 lbs for UPS Express and Ground services incur a $35.00 surcharge as of January 24, 2023.
  • Dimensions: Similar to FedEx, UPS applies additional charges for packages exceeding certain dimension limits.
  • Packaging: UPS also charges for non-standard packaging, though the exact criteria weren’t retrieved.

Like FedEx, UPS applies a Peak Additional Handling Surcharge during peak times.

High-volume shippers can negotiate terms with UPS to potentially reduce or avoid these charges, mirroring strategies used with FedEx.

Understanding and managing shipping spend is crucial, especially in e-commerce. Knowing these surcharges and potential avoidance strategies can give businesses a competitive edge.

Current FedEx Charge (2023): Ranges from $18.50 to $36, contingent on shipment billable weight and destination zone.

New FedEx Charge (2024): Ranges from $22 to 43.50

To dodge these charges, companies like us at 3PL Center negotiate contracts with carriers or revise weight and dimension limits triggering the surcharge. We negotiate contracts with FedEx to potentially reduce fees by 25-75%.

Oversize Package Surcharge

FedEx and UPS enforce an Oversize Package Surcharge for unusually large packages exceeding defined length or girth limits.

Current FedEx Charge (2023): Ranges from $135 to $200, contingent on shipment billable weight and destination zone.

New FedEx Charge (2024): Ranges from $160 to $240

This surcharge is separate from the Additional Handling Surcharge and applies to packages breaching length or girth specifications.

Calculating this surcharge involves measuring package size in terms of length and girth.

Residential Delivery (RESI) Surcharge

Primarily impacting eCommerce shippers, the Residential Surcharge applies to deliveries made to homes or private residences. Both FedEx and UPS impose this fee, considering residential deliveries more time-consuming and costlier due to less dense delivery routes.

FedEx charges this surcharge for home or private residence deliveries via FedEx Ground and FedEx Home Delivery.

Current FedEx Charge (2023): $5.80 to $185

New Fedex Charge (2024): $6.15 to $200

Strategies to manage Residential Surcharges include address validation before shipping and considering alternate shipping options like FedEx Ground Economy.

Fuel Surcharge (FSC)

FedEx and UPS apply a Fuel Surcharge, varying weekly based on changes in fuel prices. This surcharge, based on a percentage of the base shipping rate, fluctuates in response to fuel price alterations, usually about 12-20% of the base transportation charge.

Delivery Area Surcharges (DAS)

Ever send something to a not-so-easy-to-reach place? If it’s in specific zip codes outside the usual service area, carriers add charges. FedEx and UPS levy a Delivery Area Surcharge for deliveries to remote or less accessible ZIP codes within the United States. This fee varies depending on service level and destination. About 30% of the US population lives in these zones.

Current FedEx Charge (2023): $5.55 to $66.25 per shipment depending on applicable services such DAS Residential Extended or Remote Residential

New Fedex Charge (2024): $5.85 to $71.25

Understanding the nuances of these surcharges can aid in strategizing shipping processes and budgeting during peak seasons. At 3PL Center, we negotiate rates with carriers to reduce these shipping surcharges.

Return Label and Print Return Label Surcharges

These surcharges are applied by FedEx and UPS when creating return shipping labels for customer returns, adding to shipping costs.

At 3PL Center, we offer our customers access to simply print their own labels using our discounted shipping rates.

Signature Required Surcharge

FedEx, UPS, and USPS offer delivery confirmation options requiring signatures, each with its associated surcharge.

Current FedEx Charge (2023): $7.65 to $44.45 per shipment

New FedEx Charge (2024): $8.15 to $47.25

Peak Surcharge

During high-demand periods, FedEx and UPS may introduce Peak Surcharges, typically around holidays, aiming to cover heightened operational expenses. These surcharges, common during peak times like the holidays, offset increased costs stemming from higher shipment volumes. For FedEx, these fees apply to specific criteria like extra handling and oversized packages, announced beforehand. UPS mirrors this practice, especially for residential, large, and oversize shipments, disclosed ahead of the holiday season. Understanding these surcharges aids businesses in planning shipping strategies and budgets. Keep in mind, specific surcharges may vary annually, so it’s advisable to refer to the carriers’ official updates.

To see the list of FedEx’s 2023 peak season surcharges (which they now refer to as demand surcharges) click here: https://www.fedex.com/en-us/shipping/rate-changes/demand-surcharges.html

Hazardous Materials Surcharge

Carriers impose this fee on shipments containing hazardous materials like lithium batteries, necessitating special handling and labeling.

Current FedEx Charge (2023): $48 per package

New FedEx Charge (2024): $51 per package

Understanding the complexities of shipping hazardous materials, particularly lithium batteries, involves adhering to strict regulations for packaging, labeling, and handling.

Navigating these charges involves staying updated on regulations, proper packaging, labeling, staff training, and compliance with carrier guidelines.

At 3PL Center, we have extensive experience in shipping hazardous materials such as lithium batteries. We are one of the largest 3PL providers for multiple e-bike companies across the globe. We have the expertise at not only proper handling and packaging of these materials, but also in providing our customers with our exclusive discounted shipping rates.

FedEx and UPS Weekly Service Charge

This charge applies to regular daily pickups and can be mitigated by dropping off shipments, negotiating terms, evaluating shipping volumes, exploring alternative carriers, or partnering with a 3PL.

These surcharges, while not exhaustive, underscore the importance of comprehending additional fees, aiding in effective shipping strategies and cost-efficient deliveries for businesses and customers alike.

To see the entire list, click here: 2024 changes to FedEx Express & FedEx Ground surcharges & fees

How 3PL Center Can Help Your Business Save

This is where 3PL Center comes to the rescue. 

At 3PL Center, we have established relationships with carriers. Leveraging these connections, we negotiate discounted shipping rates for our clients. These negotiated rates often encompass reduced or waived surcharges, significantly cutting down on additional expenses.

By partnering with 3PL Center, businesses gain access to a dedicated team that not only negotiates better rates but actively seeks opportunities to reduce or eliminate these surcharges. Our commitment extends beyond cost-cutting; we prioritize efficiency, reliability, and cost-effectiveness in your logistics operations.

With 3PL Center as your strategic logistics partner, businesses can navigate the complex terrain of surcharges with confidence, knowing that we’re tirelessly working to secure reduced fees and waivers, ultimately optimizing your shipping processes and bolstering your bottom line.

Hope this makes navigating those tricky shipping surcharges easier! And remember, partnering with 3PL Center means more than just getting better rates; we work hard to find smart ways to lower these extra costs and make shipping smoother for your business.

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