Why Is UPS Charging a Surcharge?

May 22, 2022

Shipping can be expensive, especially when parcels are consistently being sent out your doors. On top of that, UPS surcharges can increase shipping costs to the point companies might be unable to maintain current profit margins over time. But surcharges have themselves raised, which begs the question, why is UPS surcharging? UPS charges fees for additional handling or specific conditions like international or remote shipping. And in 2020, UPS made their peak/holiday surcharge prices year-round, with no sign to return to a true peak season. These surcharges are constructed to fund getting your package where it needs to go on time, but are not built into the shipping cost themselves. A parcel invoice audit is one way to create a plan to adjust to these fees. To better understand why UPS surcharges exist, let's start with what shipping surcharges actually are.

What Is a Carrier Surcharge Fee?

To put it simply, any fee for additional services added to the base cost of shipping an item is referred to as a shipping surcharge. They might be listed as various things on an invoice, but they're most commonly referred to as handling costs or service fees. Surcharges for extra handling, special service, unique delivery, or other expenditures related to delivering products with exceptional needs or conditions are covered by delivery surcharges. The abundance of shipping surcharges makes it difficult for merchants to identify what should be added to their base transportation costs. UPS surcharges vary on shipments to cover transportation and other handling charges.

What are UPS surcharges you might expect for shipping to include?

Service to remote and distant locations
Shipping to other countries
Fuel (both ground and air)
Items that are bulky, heavy, oversized, or fragile
Deliveries on weekends
Etc.

If you do decide to utilize UPS, do your research ahead of time to see what kinds of shipping expenses you could incur due to product size, weight, or special handling requirements. The increase in shipping could affect customers' delivery costs. This is where ShipSigma can help you optimize your shipping while negotiating the expenses associated with your parcels.

What Is a Handling Surcharge?

A handling fee is when a carrier charges a business to cover expenditures that are unrelated to the product itself or shipping. UPS charges an extra handling surcharge when a cargo demands more work on its part. A fee is imposed when goods exceed certain weight or size limitations, or when the package is something other than a squared cardboard box. So does UPS charge by weight or size? They charge both, depending on the package.

The current UPS additional handling surcharge is:

Weight $26.25 (Domestic) / $20.45 (International)
Length $20.45
Width $20.45
Packaging $20.45

To combat this expense, look at the specifics of your shipping processes.

Many shippers ignore package sizes, as they use overly large boxes for the product inside or overload the box when individual shipments would be cheaper. You can use the UPS oversize calculator to find the proper packaging for your product.
Once you've determined the appropriate packing, ensure that your warehouse crew selects the appropriate boxes for each shipment. Sometimes package sizes are identical, and the extra inch of a box that your fast-moving workforce unintentionally removes can result in a surcharge based on dimensions.
Check your invoices to ensure UPS didn't make a mistake and correctly applied the surcharge. Make sure to look out for instances of incorrect additional handling costs.
Many shippers are unaware that they might lower this cost by negotiating with their carriers. If you can't avoid the price because of what products you offer, you can negotiate a reduced rate with your carrier.

While handling fees can add up, it's important to look out for ways to save and ensure you're efficiently shipping your parcels. By being aware of the sizes of your packages, you'll be able to better estimate your costs while also maximizing productivity and reducing any extra expenses.

Frequently Asked Questions About UPS Surcharges

When did UPS make peak surcharges permanent?

UPS converted its peak and holiday surcharges to year-round fees in 2020, with no indication of a return to a true seasonal peak structure. Shippers who budgeted only for peak-season surcharge windows now face those costs continuously throughout the year.

How does UPS calculate additional handling surcharges?

UPS applies additional handling charges based on four criteria: weight ($26.25 domestic, $20.45 international), length ($20.45), width ($20.45), and packaging type ($20.45). A package triggers the surcharge if it exceeds defined weight or size thresholds, or if it is packaged in something other than a standard square cardboard box.

Does UPS charge by weight or size?

UPS charges based on both weight and size, applying separate surcharge rates for each dimension. A single shipment incurs multiple additional handling fees when it exceeds thresholds for weight, length, and width simultaneously.

How can shippers reduce UPS additional handling fees?

Right-sizing packaging, auditing invoices for misapplied charges, and negotiating reduced rates with UPS are the three primary methods for cutting additional handling fees. Ensuring warehouse staff consistently select the correct box size for each shipment also prevents accidental surcharges from minor dimension overages.

What types of shipments trigger UPS fuel surcharges?

UPS applies fuel surcharges to both ground and air shipments, making the fee applicable across all standard delivery services. Fuel surcharges are added on top of the base shipping rate and are not included in the quoted transportation cost.