Common Fees That Affect UPS^® Shipping Costs

When shipping with UPS®, understanding various fees can help manage costs effectively. Common fees include fuel surcharges, residential delivery charges, and additional handling fees. Understanding these charges is crucial for budgeting and optimizing shipping strategies. This guide will break down these fees and offer tips on how to mitigate their impact on your shipping expenses!

Residential Delivery Surcharges

Just because your recipient is a business doesn't mean that business resides in a commercial area. UPS prices commercial addresses differently than residential, so before you ship, be sure to determine if your shipping address is commercial or residential. If you end up shipping to a residential business address, including any location that is a home or private residence, always check the "Residential" box on your shipping quote so your estimate accurately reflects the associated UPS shipping fees. If you do not designate that your recipient's address is residential, the carrier can make this determination upon delivery and apply the charge to your final invoice.

Pickup Fee

Convenience often comes at a cost. If you schedule a pickup service for your small package shipments, your invoice is subject to a pickup fee. These fees can add up quickly, especially based on the frequency and size or weight of the packages. Most carriers have multiple pickup options to choose from, so you can select the one that works best for your company's shipping frequency and volume. To avoid pickup fees, consider taking your packages to the nearest UPS Dropbox or drop-off location. As an authorized UPS reseller, your local Unishippers office can request to have a UPS Dropbox installed nearby!

Delivery Area Surcharge

Your UPS shipping costs increase when you send packages to remote or rural areas. A delivery area surcharge or extended area surcharge is applied to packages shipped to less-accessible ZIP codes within the contiguous United States or to remote, less-populated international locations. If not indicated in your initial shipping quote, the driver will apply an area surcharge upon delivery. To know when these fees apply to your business shipments, check your recipient's ZIP code on the UPS website.

Address Correction Fee

An incorrect address can delay delivery and increase UPS shipping costs. If your package lists an incorrect or incomplete address, UPS will attempt to correct it and an address correction fee will be applied to your final invoice. You can easily avoid these expenses by verifying that the address is correct on all of your shipments.

Additional Handling Surcharges

An additional handling fee is applied to irregular or heavy packages which require special handling. Make sure to check the carrier's specific guidelines on what constitutes additional handling, such as packages with measurements exceeding 48 inches on the longest side, when the average weight per package is greater than 50 pounds, or if it's encased in non-standard packaging. This can also include anything that might cause an issue with a carrier's conveyor belts, slides, sorting machines and so forth, which could lead to additional UPS surcharges. UPS lists their complete guidelines on their website.

Dimensional Weight

While not a common small package fee, dimensional weight can contribute to unexpected costs on your final shipping invoice. Dimensional weight refers to your package's density — the amount of space it occupies in relation to its actual weight. When calculating your shipment's billable weight, a carrier will use the greater of its dimensional or actual weight. By using smaller packaging and avoiding over-boxing, you can help lower your shipment's dimensional weight. Provide accurate dimensions, not just estimates, so that when your package is audited, the carrier doesn't adjust your billable rate higher than the price you were quoted. Download our free guide, "Small Package Shipping Rates: How Size and Weight Affect Price" for some quick answers on how dimensional weight impacts the cost of shipping.

Other Types of Fees & Surcharges

In addition to the common surcharges, there are other fees that you should be aware of:

Fuel Surcharges

Shipping costs can fluctuate with the price of fuel, and UPS applies a fuel surcharge to most services. This surcharge is calculated as a percentage of the base rate and other surcharges, varying weekly based on the national U.S. on-highway average fuel price for a gallon of diesel fuel, and can differ between UPS and FedEx. While it's challenging to avoid this fee entirely, being aware of its impact can help you budget more accurately for your shipping expenses. Unishippers can help you stay informed about these fluctuations and their potential impact on your shipping costs.

Peak/Demand Surcharges

During high-volume shipping periods, such as the holiday season, UPS may implement peak or demand surcharges. These temporary fees are designed to offset the increased costs associated with handling higher package volumes. Knowing the current UPS additional surcharge rates is crucial for effective planning. Unishippers keeps our customers informed about these seasonal changes, helping you plan and budget accordingly to minimize their impact on your bottom line.

Large Package Fees

Packages that exceed certain dimensions may incur a large package surcharge. A package is considered "large" if its length plus girth [(2 x width) + (2 x height)] combined exceeds 130 inches, a rule applied by both UPS and FedEx. To avoid this substantial fee, consider breaking down large items into smaller packages when possible or explore alternative shipping methods for oversized items. Unishippers can provide guidance on the most cost-effective ways to ship larger items in light of package shipping limitations.

Saturday Delivery Fee

For businesses that need to offer weekend delivery options, it's important to be aware of the Saturday delivery fee. This surcharge applies to packages delivered on Saturdays and varies depending on the service level and whether the destination is commercial or residential. While this service can be valuable for meeting customer expectations, it's crucial to factor in these additional costs when pricing your products or services. Unishippers can help you determine when Saturday delivery makes sense for your business and how to optimize its use.

Remote Area Surcharge

Shipping to certain ZIP codes in Alaska and Hawaii can incur a remote area surcharge. These surcharges reflect the additional costs associated with delivering to these remote locations. If your business frequently ships to these areas, it's crucial to factor these fees into your shipping strategy. Unishippers can assist in developing a cost-effective approach for serving customers in these remote regions while managing your shipping expenses.

Strategies to Minimize UPS Fees and Control Shipping Costs

Implementing strategies to avoid and reduce UPS surcharges can significantly lower your shipping costs:

Importance of Accurate Package Information

Accurate package information is crucial to avoid UPS surcharges. Ensure that you measure and weigh your packages correctly. Using proper packaging techniques can help you avoid additional handling surcharges. Unishippers offers tools and resources to help you provide accurate package information, reducing the risk of unexpected fees.

Address Verification

Incorrect addresses can lead to address correction fees, delaying your shipments and increasing your shipping costs. Utilize tools and methods to verify residential addresses before shipping to avoid residential surcharges and other extra fees. Unishippers provides address verification services to help you avoid these additional charges and ensure timely deliveries.

Optimizing Your Packaging

Choosing the right box sizes and minimizing empty space in your packages can help you avoid dimensional weight surcharges. Proper packaging also reduces the risk of additional handling fees. Unishippers offers packaging optimization guidance to help you find the most cost-effective packaging solutions for your shipments while taking surcharge rates into account.

Making the Most of Your Shipping System

Using shipping systems like the myUnishippers Parcel TMS platform can streamline your shipping process and help you avoid surcharges. These systems offer features that ensure accurate package information and address verification. Unishippers integrates with UPS systems to provide seamless shipping solutions for your business, reducing the cost of shipping and managing UPS additional surcharges effectively.

Cost-Saving Tips for Small Businesses

Small businesses can benefit from various cost-saving strategies to manage their shipping expenses:

Leveraging Unishippers' Small Business Solutions

Unishippers offers a range of services designed to help small businesses save on shipping costs. By partnering with Unishippers, you can access negotiated UPS shipping rates and benefit from our expertise in managing UPS surcharges. Our small business solutions are tailored to meet your specific shipping needs, helping you reduce costs and improve efficiency.

Analyzing Your Shipping Data

Regularly analyzing your shipping data can help you identify patterns and potential savings, especially when dealing with peak season surcharges and fuel price fluctuations. Adjusting your shipping strategies based on this data can lead to significant cost reductions. Unishippers provides data analysis services to help you understand your shipping profile and identify opportunities for savings.

Staying Informed on Rates

Staying informed about UPS rate changes and updates is essential for managing your shipping costs. UPS announces rate changes and new surcharges periodically, and being aware of these changes can help you plan and budget more effectively. Unishippers provides regular updates and UPS rate guidance, helping you stay informed and adjust your shipping strategies accordingly.

Additional Resources

For a complete list of UPS surcharges and to learn more about how to manage and reduce your shipping expenses, contact Unishippers today. Our team of experts is here to provide ongoing support and resources, helping you navigate the complexities of UPS surcharges and optimize your shipping strategy to control the cost of shipping. Reach out today for a free consultation!

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