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What is a UPS Residential Surcharge?

Nov 28, 2022

6 min read

As a shipper, you can request delivery to any address. However, when your packages are shipped to a residential area, shipping companies like UPS charge additional fees called a residential surcharge.

These added fees cover the higher costs of delivering a single package to a single location. In contrast, commercial deliveries are typically sent to commercial zones, enabling drivers to deliver multiple packages in the same area.

Every year, major shipping carriers, like UPS, increase their shipping and surcharge rates, known as the “General Rate Increase” (GRI) or “General Price Increase” (GPI). Recently, UPS announced an increase in peak season surcharges directly affecting high-volume residential delivery shippers.

This guide contains everything you need to know about the UPS residential delivery surcharge and how to avoid paying it.

Soaring shipping costs may seem out of your control, but they don’t have to be. At Sifted, we help you understand the complete breakdown of your transportation costs and reduce costs with AI-powered demand forecasting.

 

How Much Is the UPS Residential Surcharge?

Effective December 27, 2021, the UPS residential delivery surcharge rates are below.

Residential SurchargeApplicable Services2021 Rate Per Package2022 Rate Per Package
Domestic ServicesUPS Ground Service$4.45$4.85
UPS Air Service$5.00$5.15
Hundredweight (and Ground with Freight Pricing)$43.20 per shipment$46.80 per shipment
International ServicesUPS Standard Services$4.80$5.20
UPS International Air$5.00$5.35
UPS 3 Day Select from Canada$5.00$5.35
UPS Worldwide Express Freight Services$160.00$170.00

Check the 2022 UPS Rate & Service Guide for more information on residential surcharges.

The table below shows the domestic UPS delivery times for different service levels when sending a 3 lb package measuring 8” x 6” x 6” from a commercial address in Boston, Massachusetts, to a residential address in Brooklyn, New York, using the UPS Shipping Rate Calculator.

Service LevelEstimated Cost
UPS Next Day Air Early$105.93
UPS Next Day Air$89.30
UPS Next Day Air Saver$60.68
UPS 2nd Day Air$32.51
UPS 3 Day Select$25.60
UPS Ground$12.50

UPS residential delivery surcharges are applied in combination with other charges, including delivery area surcharge, delivery area surcharge extended, and remote area surcharge.

Delivery area surcharge is applied to packages based on shipping zones, including for Alaska and Hawaii. Here’s a look at other UPS services that assess an additional surcharge for residential pickup and delivery:
Delivery Area Surcharge

Delivery Area SurchargeEstimated Cost
Ground Residential$4.80
Ground Residential Extended$6.50
Air Residential$5.20
Air Residential Extended$6.50
Residential$4.80
Extended Residential$6.50

UPS On-Call Pickup® service assesses residential surcharge for extended area or remote residential pickup.

UPS On-Call Pickup Area SurchargeEstimated Cost
Residential$4.80
Extended Residential$6.50

UPS charges a residential surcharge in addition to the large package surcharge based on the shipping zone.

Large Package Surcharge (Residential)Estimated Cost
Zone 2$135
Zone 3 and 4$145
Zone 5+$165

Visit ups.com for revised UPS value-added services and other charges.

Calculate the shipping charges for your packages with Sifted’s dimensional weight calculator!

 

When Does the UPS Residential Surcharge Apply?

Residential surcharges are an added fee applied to packages sent to house or apartment addresses, including businesses operating out of a home and buildings that don’t have an entrance open to the general public. Deliveries to a non-commercial address require the delivery driver to physically take the package to the recipient’s doorstep.

UPS may also charge a residential surcharge on a package if the delivery address is deemed a mixed-use building or farm. Similarly, depending on the UPS system, residential surcharges may also apply to facilities rezoned from commercial to residential.

Residential Surcharges do not apply to UPS Simple Rate shipments. It is UPS’s version of flat-rate shipping with a maximum package weight limit of 50 lbs.

In addition, UPS penalizes high-volume shippers who ship more than 20,000 packages per week (both residential and commercial shippers). These residential charges apply to certain UPS Ground Residential, Air Residential, and SurePost service levels based on average weekly shipping volume.

Peak/Demand surcharges are applicable between October 30, 2022, and January 14, 2023.

Applicable service>105% to 125%
of baseline shipping volume
>125% to 150%
of baseline shipping volume
>150% to 200%
of baseline shipping volume
>200% to 300%
of baseline shipping volume
>300% to 400%
of baseline shipping volume
>400%
of baseline shipping volume
UPS SurePost$1.25$1.75$2.00$2.50$4.25$6.00
UPS Ground Residential$1.25$1.75$2.00$2.50$4.25$6.00
UPS Next Day Air Residential$2.25$2.75$3.00$3.50$5.25$7.00
All Other UPS Air Residential$2.25$2.75$3.00$3.50$5.25$7.00

UPS Residential Delivery Hours

MasterCard forecasts U.S. retail sales to grow by 7.1%, year over year, during the 2022-2023 holiday season. Similarly, a 2022 Deloitte report revealed that eCommerce holiday sales are projected to reach between $260 billion and $264 billion this season.

It is essential for eCommerce shippers to understand the UPS delivery times for the various service levels to deliver packages to their customers promptly and boost sales this holiday season.

UPS typically delivers packages between 9 AM and 7 PM (local time) to residential addresses on business days.

Service level (domestic)Estimated delivery timeDelivery hours (with some limitations to Puerto Rico, Alaska and Hawaii)
UPS Ground1 to 5 business daysDay-definite delivery
UPS Next Day Air Early1 business dayGuaranteed on-time delivery by 8:30 AM on business days
UPS Next Day Air1 business dayGuaranteed on-time delivery by 10:30 AM or 12:00 PM by the end of the second business day
UPS Next Day Air Saver1 business dayGuaranteed on-time delivery by 3:00 PM or 4:30 PM by the end of the second business day
UPS 2nd Day Air A.M.2 business daysGuaranteed on-time delivery by 10:30 AM or 12:00 PM by the end of the second business day
UPS 2nd Day Air2 business daysGuaranteed delivery by the end of the second business day
UPS 3 Day Select3 business daysGuaranteed delivery by the end of the third business day

These delivery times depend on various factors, including the shipping option you choose, distance, peak season, holidays, transportation, and weather conditions.

UPS, like most small package delivery services, offers day-definite deliveries. This means they deliver within specific delivery timeframes, typically one to five days. If your UPS package doesn’t arrive on time, you will be entitled to a full refund of the shipping costs.

Let’s look at some helpful surcharge hacks to help you avoid overpaying shipping fees.

Having a hard time staying on top of potential refunds? Simplify this process with Sifted’s automated parcel audit that keeps track of this for you!

 

How to Reduce UPS Surcharges

In addition to the residential surcharge, UPS applies a variety of other surcharges, including peak surcharge, oversize pallet handling surcharge, large package surcharge, additional handling, and address correction surcharge. These charges can quickly add up for merchants that don’t pay close attention to their shipping fees.

UPS shipping charges depend on various factors, including the delivery addresses. You can minimize the impact of residential surcharges by understanding the different options available to you. Here’s a look at the most common ways shippers minimize the impact of UPS residential surcharges:

  • Renegotiate carrier contracts: UPS has a 2022 residential surcharge of $4.85 for a ground shipment and $5.15 for an air shipment. If you are a high-volume shipper, you can negotiate these rates with your carrier and get a discount.
    Sifted contract engineering helps you rate-shop between carriers, so you can evaluate rating scenarios and identify the least expensive service mix.
  • Consider alternative service levels: You can avoid paying residential surcharges by using flat-rate shipping options like UPS Simple Rate or FedEx One Rate to ship your packages. Alternatively, you can send your packages with USPS (United States Postal Service) as it doesn’t charge residential surcharges.
  • Offer flexible delivery options: Eliminate residential address surcharge by allowing your customers to collect packages from one of your physical store locations. Similarly, you can allow your customers to pick up their packages from access points and lockers near their location.
  • Use a parcel audit service: Shipping companies often misapply residential and delivery area surcharges. Parcel audit software empowers your team with data to identify discrepancies in your parcel invoices and request refunds for incorrect charges or service levels applied.

Sifted’s parcel audit automatically reconciles your carrier invoices, checking them for errors, so you can recuperate costs based on Money Back Guarantees.

 

Reduce Residential Surcharges with Sifted

Residential surcharges can significantly increase the cost of each package going out the door. Shippers can take specific measures to reduce the amount they are paying in surcharges like renegotiating carrier contracts and regularly auditing parcel invoices.

A logistics intelligence tool like Sifted can help you accurately track residential surcharges based on carrier rules and even contest surcharges and put more money in your wallet.

Ready to increase visibility in your shipping expenses? Get a free demo from Sifted!

Topics: Parcel, Parcel Carriers, Residential Surcharge, Surcharges, UPS
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