Quarterly Live Group Demo Watch Now

Sifted logo

How Much Do You Know About Surcharges?

by | Jun 15, 2020

3 min read

 

We haven’t found a shipper yet who likes surcharges, but they’re a frustrating fact of shipping life, unfortunately. The best you can do is make yourself aware of the surcharges that are most likely to affect your business and seek out ways to lower them. 

Surcharges are carriers’ way of passing their costs on to you. When they have to do extra work to get your packages where they need to go, you pay the price — literally. 

With one of the largest collections of parcel data in the U.S., we know a thing or two about surcharges and which ones affect shippers the most. Surcharges can get overwhelming in a hurry, so we put together some quick info to help sort it out.

Check out our video above or read on!

 

5 budget-busting surcharges to watch out for

  1. Address Correction: This surcharge occurs any time the carrier has to fix the address on a package for you. Even slight differences from the actual address can incur the charge. Carriers charge $17 to $119 to correct the address for you, depending on the shipment type.
  2. Residential Delivery: This surcharge kicks in when a delivery is going to a location that carriers have designated as residential. Depending on the carrier, you will pay anywhere from $4 to $4.70 for ground and $140 to $150 for freight.
  3. Delivery Area and Extended Area: The Delivery Area Surcharge (DAS) and Extended Area Surcharge (EAS) both occur when your shipment is being delivered to a remote area, as defined by a set of more than 25,000 ZIP codes. For DAS, carriers add $2.95 to $4.40 to your shipment. For EAS, you’ll pay $3.45 to $5.40 or even $27 extra for a shipment on a pallet.
  4. Additional Handling: This surcharge is for packages that need extra attention from the carrier, based either on their weight or dimensions. Carriers charge $15 for packages that require extra handling based on dimensions and $24 when based on weight. They will charge you based on the larger of the two.
  5. Oversize/Large Package: This surcharge, called Oversize or Large Package depending on the carrier, is levied on shipments that exceed certain size limits. For both carriers, that means packages larger than 96 inches in length or 130 inches in length and girth (two times the width plus two times the height of the package).

 

How surcharges affect your shipping costs

Surcharges can account for 30 percent of your shipping invoices, making packages cost far more than you might have planned.

For instance, thanks to a lower threshold in 2020 for weight-based additional handling surcharges, a 51-pound ground package shipped this year costs nearly $26 more than last year. If you plan your shipping spend only around the General Rate Increase (4.9% for 2020), you might find your budget out of whack because of the increases in individual surcharges. It’s crucial to stay up to date on all surcharges — especially the ones most likely to affect your shipping profile — so that you aren’t shocked when your invoices roll in.

 

How you can stay ahead of surcharges

Beating surcharges starts with knowing which ones are affecting your business the most.

  • Dig deep into your own data. Understanding your own shipping profile as well as your carrier does is no easy task, but it’s important. It puts you in a better position to optimize your carrier contract and to make decisions about your shipping operations.
  • Revamp your operations. Once you’ve got a handle on your data, you can review your product mix and placement, your routing guidelines and distribution network, and your packaging to get everything ship-shape.
  • Let technology do the work. Analyzing your own data and looking for surcharges and ways to improve is a full-time job in itself — unless you have help. Look for solutions that sort and analyze your data and then deliver you actionable reports you can use to make changes that matter.

 

Get the full scoop on surcharges

For more on these shipping costs and actionable tips on getting them under control, check out our eBook, 5 Budget-Busting Surcharges & How to Lower Them. It’s packed with the info you need to know to avoid surcharge surprises.

Topics: Additional Handling Surcharge, Large Package Surcharge, Surcharges
Topics

Check out related resources at Sifted.

Network Optimization 101: The Impact of Carrier Diversification on Supply Chain Resilience

Network Optimization 101: The Impact of Carrier Diversification on Supply Chain Resilience

FedEx and UPS had the same GRI for 2024 at 5.9%. Down 1% from 2023’s 6.9% increase. American businesses are facing ...
Read More
How To Implement Artificial Intelligence To Boost Your Supply Chain Operations

How To Implement Artificial Intelligence To Boost Your Supply Chain Operations

By 2027, the global last-mile delivery market is expected to soar past $200 billion, up from $108.1 billion in ...
Read More
How Amazon Is Using AI To Become the Fastest Supply Chain in the World

How Amazon Is Using AI To Become the Fastest Supply Chain in the World

Did you know that Amazon has been using machine learning and AI for more than 25 years? Yes, 25 years! That’s ...
Read More
Survey: Consumer Home Delivery Preferences

Survey: Consumer Home Delivery Preferences

In the eCommerce landscape, the way brands interact with their customers is evolving. While optimized store ...
Read More
How to Evaluate Carrier Performance Across Diverse Networks

How to Evaluate Carrier Performance Across Diverse Networks

Carrier Diversification allows businesses to: 1.  Compare and choose the most cost-effective shipping rates. 2.  ...
Read More
How AI and Machine Learning are Transforming the Logistics and Supply Chain Industry

How AI and Machine Learning are Transforming the Logistics and Supply Chain Industry

Supply chains and logistics companies powered by AI (Artificial Intelligence) are seeing a 20% reduction in ...
Read More
Sifted at Home Delivery World 2024 – What to Know

Sifted at Home Delivery World 2024 – What to Know

On June 5-6, experts in direct-to-consumer shipping will gather at the Pennsylvania Convention Center in ...
Read More
Parcel Carrier Diversification 101

Parcel Carrier Diversification 101

Last mile delivery has never been more important to businesses. In 2023, the global last mile delivery market was ...
Read More
RILA LINK 2024 Recap: The Cutting-Edge of Retail Supply Chains

RILA LINK 2024 Recap: The Cutting-Edge of Retail Supply Chains

At the end of February, supply chain leaders from the nation’s largest retailers converged in Dallas for the ...
Read More
Sifted’s Caleb Nelson Named 2024 “Pros to Know” Award Recipient

Sifted’s Caleb Nelson Named 2024 “Pros to Know” Award Recipient

KANSAS CITY, Missouri - Sifted, the trailblazer in Logistics Intelligence™ is proud to announce that Caleb Nelson, ...
Read More
Meet Sifted at LINK 2024

Meet Sifted at LINK 2024

At the end of February, the top supply chain leaders from some of the nation’s largest retailers will converge in ...
Read More
Parcel Carrier Comparison Guide

Parcel Carrier Comparison Guide

In the intricate landscape of parcel shipping today, shippers navigate a complex web of carriers, each with its ...
Read More

How Sifted Works

Connect to
your account

Sync
your data

Power your
dashboards

Get Your Logistics
Intelligence Demo

Strategic ways to prevent loss down the line

Services you could be utilizing right now for savings

Ways to cut material costs without cutting quality

Shipping Insights & Alerts
Get updates and track the things impacting your business most

Decision Support
See how supply chain adjustments pay off before you pay out

Carrier Management
Streamline how you manage your carrier operations and contracts

Business Automation
Let software do what it does better than people can

Blog
Discover news, tips, and industry best practices

DIM Weight Calculator
See how DIM is impacting you

Podcast
Hear from industry experts on LeaderShipping

Case Studies
Learn how other brands use
Logistics Intelligence

Carbon Calculator
Calculate your CO2 Emissions

Guides
Download free reports and
expert how-tos

Demo
Get a personalized tour of our software

About Sifted
Get to know Logistics Intelligence

Logistics Intelligence
For parcel shippers

Let's get you to the right place!

SIFTED DASHBOARDS
For parcel shippers

AMAZON
Redirect to Valence Intelligence Login

Not sure if you have an account? Email [email protected].