How to Save Money on Shipping - Part 3: Surcharges and Other Charges

Both UPS and FedEx are very particular about what they ship.  They do this to ensure that shipments are packaged in a way that works within their systems and to ensure as much reliability as possible.  To ensure packages fit their systems, and to cover costs when shipments do not (carriers have two sources of expenses - size and weight), they both assess various surcharges on certain shipments.  These can easily add up to be significant expenses.

Size and Weight

Space is limited with parcel carriers,
so package size is important

Both carriers will assess a surcharge for packages that are too large for their system.  If a package does not fit on their conveyor systems, a surcharge is assessed.  Additionally, their delivery trucks will only accommodate packages up to a certain size.

• Additional Handling (UPS 2014 - $8.95, FedEx 2014 $8.50)
  
  • Any package where the longest side exceeds 60 inches or its second longest side exceeds 30 inches.
  • Any package with an actual weight of more than 70 pounds
  • Each package in a shipment where the average weight per package exceeds 70 pounds and the weight for each package was not specified when the package was manifest (when the label was printed)  
    
• Over Maximum Limits (UPS 2014 - $51.65, FedEx 2014 - $55.00)
• Packages with an actual weight of more than 150
• Packages that exceed 108 inches in length
• Packages that exceed 165 inches in length + girth [(2 x width) + (2 x height)] 
• Large Package Surcharge (UPS 2014 - $56.60, FedEx 2014 - $55.00)
• Applied when Length + Girth [(2 x width) + (2 x height)] exceeds 130 inches
• If the size criteria is met, the package is subject to a minimum billing weight of 90 pounds

Dimensional Weight
Dimensional Weight is when the carrier determines that the size is more important than the weight (i.e. - lightweight, but large boxes).  If the dimensional weight of the package is greater than the physical weight, then the dimensional weight will be applied.  You can only know if dimensional weight applies by entering accurate (rounded up) package dimensions into your shipping system.

Example: a 19" x 13" x 32" 8lb package is billed as a 48lb pkg due to dimensional weight

If the dimensions were not entered when the package was manifest, you would have thought your shipping costs were approx $10.29.  With the dimensional weight applied, the actual shipping cost is $24.08 - more than twice what you may have billed the customer (prices quoted are from UPS Daily Rates shipping to Zone 2).

Packaging

Not fully encased in cardboard

Due to how their conveyor systems work, both carriers require that packages be totally encased in cardboard.  No other material is guaranteed to move safely on these systems, imperiling both that package and others around it.  As a result, a surcharge is applied to packages that do not meet this requirement.

• Additional Handling (UPS 2014 - $8.95, FedEx 2014 - $8.50)
• Any item encased in an outer shipping container made of metal or wood
• Any cylindrical-like item, such as a barrel, drum, pail or tire, that is not fully encased in cardboard.

Address Accuracy
Both carriers offer many online resources to help you ensure the accuracy of your delivery address, but they're only as good as the address you provide.  Make sure you use the correct address.  Pay attention to your invoices and your online tracking to ensure you're aware of any incorrect addresses.  You can then correct them in your system rather than repeatedly incurring these charges.

• Address Correction (UPS 2014 - $12.35, FedEx 2014 - $12.00)
  Both carriers will work to correct the address provided to them, but at a price.  This is assessed per package, not per shipment, so it can add up.  These charges are specifically noted on your invoice.
• Residential Surcharge (variable)
  Both UPS and FedEx have online resources that will determine if your receiver's address is classified as residential or commercial.  Use these resources, and check your invoices, to make sure you're charging your customers the appropriate shipping.  Home based businesses, farms, and apartments can be particularly confusing with this classification.
• Remote Area/Delivery Area Surcharge (variable)
  This generally applies to more rural locations, and affects industries such as agriculture, farm, and oil.  Similar to Residential Surcharges, these will be noted in your invoice.

Complete Data Entry
It is important that you enter in all the applicable information when creating a shipment.  Not doing so can cost you.

• Weight - If you do not enter the weight, the carrier will determine it for you, but you may not have the correct information to charge your customer the proper amount of shipping.  If you over-estimate the weight, the carrier will bill you according to what you entered.  If you under-estimate the weight, they will bill you according to the actual weight (always rounded up).  In order to bill correctly, you need to enter the weight correctly.
• Size - If you do not enter the dimensions of the box, you can still have dimensional weight or other size charges applied.  Each shipment goes through a scanner that determines the size of the box.  Even if you did not enter the dimensions, if your package is large enough to warrant dimensional weight charges, they will be applied.  Enter the dimensions of the box when you manifest your shipment and you'll know if dimensional weight or other size-related charges will apply.  If you do not, you can be losing money on your shipping.

If the nature of your business precludes you from abiding by all of the size, weight and packaging guidelines encouraged by the carriers, contact your UPS or FedEx representative and see if they can help.  Depending upon your shipping volume and your individual situation, they may be able to work out a solution for you.  They may also be able to give you insight on how to get rural or other business addresses that the carrier classifies as residential reclassified as commercial.

For more tips on saving money with your shipping, read the previous two posts, How to Save Money on Shipping - Part 1: Service Levels, and Part 2: Bundling and Shipments.