What are Shipping Surcharges and How Do You Avoid Them?
Updated: Jul 25
Shipping can be expensive for small eCommerce stores. One of the main reasons for this is shipping surcharges imposed by carriers. These extra fees can really cause your shipping costs to soar.
But it’s not all doom and gloom. Surcharges can be avoided. In this post, you’ll learn the most common surcharges encountered by eCommerce stores. And you’ll find 6 ways to sidestep these extra costs and save money on your shipping.
What are Shipping Surcharges?
A shipping surcharge is an extra fee that is added to the base cost of shipping an item. Usually, they appear on invoices as a “handling charge” or “service fee”. Carriers apply these surcharges to cover the extra costs involved in shipping a product. For example, there may be extra fees for handling oversized packages, or for delivering items outside of a carrier's usual range.
Types of Shipping Surcharge
To offset their fuel costs, carriers apply a fuel surcharge for deliveries. This is often a percentage which is added to the base shipping rate. Carriers like UPS update their fuel surcharge rate on a weekly basis, but some refresh their rates monthly.
As an eCommerce store owner, you’ll likely be delivering products to customers' homes. The bad news is that most big carriers tack on a fee for shipping to a home address. UPS adds a $4.85 residential surcharge per package.
But if you ship UPS, don't worry. Further down in this post, you’ll find out a way you can avoid UPS residential fees completely… 😉
Oversized package surcharges
Major carriers like UPS and USPS have weight and size restrictions for packages. When items are over these limits, an oversized package surcharge is added. So, if your eCommerce store is shipping large items like furniture and home decor, it pays to know these thresholds.
UPS adds a surcharge if an item's dimensions exceed 130 inches, or if the length is more than 90 inches. A fee is also added if the package is heavier than 90lbs. On the other hand, USPS applies a non-standard surcharge for shipments over 22 inches or 30 inches in length.
Signature upon delivery surcharges
It’s good practice to require a signature upon delivery. In fact, most shipping insurance providers need signature confirmation to make coverage valid. Of course, when you tick that “sign on delivery” box, a fee is applied. For UPS that fee is $5.90 per item. And for USPS, it’s $3.25.
As the name suggests, Saturday surcharges are applied for shipments outside of the normal working week. In other words, if you want expedited or overnight shipping, you’ve got to pay a fee for it. For most carriers, anyways..
USPS doesn’t apply Saturday surcharges.
However, if you want to ship to your customers on a Saturday with UPS, there’s a $16 charge for expedited air services.
Address correction surcharges
Carriers impose a surcharge if a shipment has been wrongly addressed. USPS charges $0.74 per manual notice for address correction. Whereas UPS applies a sizable $19.50 fee.
Moral of the story - make sure you’ve got the address right and check it twice. Or get some software that makes sure there aren’t any address mishaps. More on that in a moment…
Rural area surcharges
Fees are also applied for packages delivered beyond a carrier's normal range. Generally, this is in lesser populated rural areas. For example, UPS adds a $26 surcharge per shipment for mailing to extended areas, as well as a $29 fee for remote areas.
6 Ways to Avoid Shipping Surcharges and Lower Your Shipping Costs
1. Be sure the delivery address is correct
First off, to avoid unnecessary shipping surcharges, make sure you’ve got the delivery address right! It sounds super simple, but you wouldn’t believe how many times this happens. And if you're shipping UPS, $19.50 is a hefty sum to pay.
To make sure you never make this mistake again, use shipping software like Ship.com. Ship.com automatically checks and corrects addresses. That way, you don’t have to worry about costly address correction.
2. Choose your carrier wisely if you’re shipping heavy or oversized items
If you’re shipping heavy or large packages, make sure you’re informed about carrier weight and size limits.
Generally, UPS is better for shipping heavier packages. UPS's upper weight limit is 90lb, whereas USPS is only 70lb. Plus, if your package exceeds 70lb with USPS it’s non-mailable and you can be slapped with a $100 fee.
To add to that, USPS charges an oversized price for items with a dimension of between 108-130 inches. But UPS has a higher dimensional limit of 130 inches. Meaning packages below this won’t receive an oversize surcharge.
3. Sidestep UPS residential surcharges by shipping through Ship.com
Is UPS your carrier of choice? Awesome! Firstly, because UPS is a great option for small business shipping. And secondly because we’ve got some great news for you…
If you ship with UPS through Ship.com, you can avoid residential surcharges completely. No more paying a fee every single time you ship to a customer's home.
4. Reduce expedited weekend deliveries
In the age of Amazon, it feels like a must to offer fast and free shipping. But for some small eCommerce businesses, it’s just not profitable. So if you want to reduce your shipping surcharge bill, try to limit expedited weekend delivery.
Save some bucks by avoiding expedited UPS Saturday delivery. If you still want your customers to be able to receive packages on weekends, opt for USPS. It may be slower, but there’s no charge.
5. Consolidate Your Parcels
Here’s a little story for you…
An eCommerce merchant has multiple orders from one customer and ships them all out in separate packages. Then they pay for a label for each single one of those packages. On top of that, they pay the surcharges for all of them.
Don’t be that person. Consolidate orders from the same customer and ship them in the same box. That way, you won’t pay surcharges x5 and you’ll save on your overall shipping costs.
Use an order management system (like the Ship.com platform) that makes combining orders easy. With Ship.com, you can consolidate orders in a couple of clicks. It’s a really simple way to save on shipping in a matter of seconds!
6. Take advantage of large UPS & USPS discounts
Some additional fees like fuel surcharges are unavoidable. However, you can reduce the impact of those extra charges with sizable discounts from Ship.com.
By using Ship.com, eCommerce stores can save up to 84% off USPS Retail prices and 78% off UPS Ground. And if you do opt to use expedited services, you’ll get up to 73% off UPS 2nd Day Air® and UPS Next Day Air®.
Conclusion - Savvy Shipping Strategy and Ship.com Discounts = Surcharges, Swerved!
If you own an online store, you will encounter shipping surcharges at some point. But by knowing what fees you face, you can be savvy with your shipping strategy and reduce surcharges. Plus, by using software like Ship.com, you can swerve residential fees, avoid costly address mistakes, and access large discounts to lower your overall shipping costs.