Understanding Postal Surcharges in Shippo

As an e-commerce retailer, your objective is to reduce shipping expenses in order to enhance profit margins. To achieve this, it is crucial to grasp how shipping surcharges, which encompass extra charges added to the transportation expenses of a product, affect your overall costs and the measures you can adopt to avoid them. 

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Common Surcharges and How to Avoid Them:

Fuel Surcharge

A fuel surcharge is an additional fee that is charged by carriers to cover the cost of fluctuations in fuel prices. Fuel surcharges are typically calculated as a percentage of the base rate. Pricing varies from carrier to carrier as well as by the type of shipping service being used.

You can check a carrier’s fuel surcharge rates before shipping out orders. You can choose to work with one that offers the lowest possible fuel surcharge rate — or none at all. Fuel surcharges can also inform the shipping decisions you make. For example, if you have any flexibility with your delivery timelines, choosing ground instead of air shipping may help you save on both shipping fees and potential fuel surcharges.

Customs Duty Surcharge

A customs duty surcharge, also known as a customs duty fee or tariff surcharge, is an additional fee imposed on imported goods by a country's government. These duties are typically based on the value of the imported goods or their quantity and can vary widely depending on the product, the origin or destination of the goods, and the trade agreements or policies in place between countries. Given the regulations, there is no way to avoid or minimize this surcharge. 

To learn more about customs declaration, duties, and fees visit- Understanding Customs Declarations.

Residential Surcharge

A residential surcharge represents an extra charge applied when delivering to a residential address rather than a commercial or business one. The definition of a residential delivery may differ depending on the carrier, but generally, carriers categorize residences as either standalone homes or businesses operating from a residential location. This surcharge is a reflection of the added expenses and logistical complexities involved in delivering to residential areas.

Residential surcharges are applied to some FedEx and UPS services. Unlike some other shippers, the Postal Service does not add surcharges for residential delivery. That said, it is always good to weigh your options when it comes to carriers and service levels to see what makes the most sense for your business to use for shipping.

Peak Surcharge

A peak surcharge is an additional fee on top of a carrier’s base rate that’s applied during times of high demand. Early October to mid-January is an especially common period of peak surcharge fees, as they help carriers offset the extra costs they incur during the busy holiday shopping season. 

You may see significant savings by choosing one option over another, depending on the specifics of your packages and destination addresses.

Adjustments

An adjustment surcharge is an additional fee that is charged if there’s a discrepancy in the shipment data, including but not limited to a difference in dimensions, a difference in weight, or an insufficient address. A cost will be incurred to account for the difference.

In order to avoid adjustment surcharges the most important things to consider are:

• Weight: Make sure that you report correct weights while purchasing labels. Due to the accuracy of carrier auditing, it is best practice to round up to account for potential inaccuracies with your home scale. 
  • For example, If your package weighs 7.2 lbs, enter it as 7.5 lbs and not 7 lbs.
• Dimensions: Report accurate dimensions when purchasing labels. Dimensional weight (volumetric weight) may apply to your packages, and providing the correct dimensions will help you avoid underpaid postage. Due to the accuracy of carrier auditing, it is best practice to round up to account for fluctuations in dimensions while in transit.
  • For example, if your package measures 5.5 x 5.5 x 5.5, enter it as 6 x 6 x 6.
  • In most cases, carriers round up to the nearest inch.
• Correct Address: Make sure that you enter the correct address and correct zip code for both the origin and destination addresses. Any discrepancies in this may result in extra charges.
  • After you have created and purchased your label, double-check to ensure the address is properly displayed.

 

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How Shippo will pass along surcharges?:

Any surcharges applied to your account may be viewed within your invoices and transactions on the Billing tab. *Surcharges are typically received within 30-60 days of shipping the parcel. ( Times may vary depending on the applied surcharge and specific shipment details.) 

 

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Various carriers apply unique surcharges tailored to their service levels and offerings. For detailed information on specific carrier surcharges, please read below. 

USPS Surcharges

Upon finding any issues with a package, USPS will charge the difference between the cost of the original label and what the cost should have been.

• NOTE: To avoid rate adjustments, ensure that you are using appropriate dimensions and weight for the service.

For more information on how to avoid USPS surcharges, you can visit this USPS guide on their website.

Fees and surcharges may apply to Priority Mail, Priority Mail Express, First Class International, and Ground Advantage shipments based on package volume and dimensions. 

Learn more about USPS Nonstandard Fees & Dimensional Noncompliance Fees.

• If dimensions are not provided or if dimensions are inaccurate: A $1.50 fee will be added for packages that are greater than one cubic foot in volume or have a box length greater than 22 inches.
• If packages have dimensions that exceed machinable sorting requirements, nonstandard sizing fees will apply as follows:
  • Packages greater than 2 cubic feet in volume: $15.00 surcharge
  • Packages with a box length over 22 inches: $4.00 surcharge
  • Packages with a box length over 30 inches: $15.00 surcharge  

Keep the following in mind when shipping with USPS services:

Nonstandard Fee & Dimensional Noncompliance Fee: If you enter incorrect dimensions or a package has a side that exceeds 20" or 30" or is over 2 cubic feet, you will incur an added surcharge fee.

Dimensional Weight: When calculating dimensional weight, the weight divisor has been lowered to 166. The formula to determine dimensional weight is (Length x Width x Height) / 166.

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FedEx Surcharges

Customers utilizing Shippo's FedEx platform account are subject to additional surcharges when warranted. Any additional charges will be reflected on their Shippo invoice. 

 In addition to the common surcharges mentioned above, FedEx has some carrier-specific charges that may apply at their discretion.

A Delivery Area Surcharge of $13.25 per package will be applied to domestic package shipments destined to select ZIP codes within the contiguous U.S. that are designated as Remote.

To learn more about FedEx rates and surcharges, please visit FedEx’s full-service guide, as well as this guide to 2023-specific changes.

 

Non-Machinable Surcharge, which is defined as:

a) Any item with one dimension measuring more than 27 inches.

b) Any item with any two dimensions each measuring more than 17 inches.

c) Any item weighing over 35 lbs.

d) Any item packaged in a cylindrical shipping tube.

 

A Pick-Up Surcharge applies when you request a pickup for a FedEx package, including requests made using FedEx electronic shipping solutions or by calling 1.800.463.3339 (saying “schedule a pickup”). $4 per package will be applied when customers call and request a pick-up from FedEx. 

 

Additional Handling Surcharge:

An Additional Handling charge will be assessed for any package that requires special handling,
as determined by FedEx in its sole discretion, including, but not limited to:

• (Dimension)
  1. measures greater than 48 inches along the longest side;
  2. package measures greater than 30 inches along the second-longest side;
  3. or the package is greater than 105 inches in length and girth — the length and girth is length plus (two times the height) plus (two times the width)
• (Weight)
  1. actual weight greater than 50 lbs.
     • (U.S. Express & Ground Services)
  2. the actual weight is greater than 70 lbs.
     • (International Express & Ground Services)
• (Packing)
  1. Non-standard packaging, including any package that:
     • is not fully encased in an outer shipping container;
     • encased in an outer shipping container not made of cardboard;
     • covered in shrink or stretch wrap;
     • is encased in a soft-sided pack (poly bags or bubble mailer) longer than 18 inches
       • or 13 inches along its second-longest side or 5 inches in height;
     • cylindrical;
     • bound with metal, plastic, or cloth banding, or has wheels, casters, handles, or straps; or
     • could become entangled or cause damage to other packages or FedEx equipment

Fuel Surcharges:

FedEx incorporates a fuel surcharge into every shipping rate, which fluctuates in response to changes in fuel prices. If your shipment dimensions or weight are audited and found to exceed the values entered during label creation, you may incur additional fuel surcharges based on the audited dimensions.

To learn more about Fuel Surcharges view here.

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DHL Express Surcharges

Fuel Surcharges:

DHL Express includes a fuel surcharge in each shipping rate. This surcharge is variable and changes as fuel prices change. DHL applies the surcharge as a percentage of the shipping rate, and the rates you see displayed in Shippo are inclusive of the fuel surcharge. For example, if the base shipping rate is $50 and the fuel surcharge for the month is 8%, the surcharge is $4. The rate you will see displayed in Shippo would be $54. You can learn more here.

Remote Area Surcharges - Non-disputable:

A Remote Area is defined as a postcode or, in the absence of a postcode, a suburb /town name that is difficult to serve. Delivery to one of the postcodes and towns on DHL's list would warrant a Remote Area surcharge. You can learn more here about the current locations on DHL's remote area list.

DHL remote areas can change daily depending on the difficulty of getting to that location on a given day. Because of this, the DHL Remote Area surcharge is non-disputable and may not be listed on the above-linked list.

Note: A Remote Area is defined as a postcode or in the absence of a postcode, a suburb /town name that is difficult to serve. A delivery to one of the following postcodes and towns would attract a Remote Area surcharge.

 

Emergency Situation Surcharge- Non-disputable:

Adjustment – Effective April 10, 2022

This is a temporary surcharge to cover operating cost increases due to an emergency out of DHL’s control. This includes (but is not limited to) changes in market dynamics and air capacity availability. DHL will continue to evaluate and adjust this surcharge as market conditions evolve for the duration of the emergency situation.

To review additional details and the pricing table for this surcharge you can learn more here.

To learn more about DHL-specific surcharges and fees click here.

 

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UPS Surcharges 

Customers utilizing Shippo's UPS Master account are subject to additional surcharges when warranted.  Any additional charges will be reflected on their Shippo invoice. 

In addition to the common surcharges mentioned above, UPS has some carrier-specific charges that may apply at their discretion.

Additional Handling Surcharge:

An Additional Handling charge will be assessed for any package that requires special handling,
as determined by UPS in its sole discretion, including, but not limited to:

Weight:

• Domestic: Any package with an actual weight of more than 50 pounds.
• Each package in a shipment where the average weight per package is greater than 50
  pounds and the weight for each package is not specified on the source document or the
  UPS automated shipping system used.
• International: Any package with an actual weight of more than 70 pounds.
• Each package in a shipment where the average weight per package is greater than 70
  pounds and the weight for each package is not specified on the source document or the
  UPS automated shipping system used.

Length plus girth:

• Any package with its length (longest side of the package) plus girth [(2 x width) + (2 x height)] combined exceeds 105 inches.

Length:

• Any package with the longest side exceeding 48 inches.

Width:

• Any package with its second-longest side exceeding 30 inches.

Packaging:

• Any article that is not fully encased in a corrugated cardboard shipping container, including tires.
• Any package with an outer shipping container not made of corrugated cardboard, including
  but not limited to canvas, leather, metal, wood, hard plastic, soft plastic (e.g., plastic bag) or
  expanded polystyrene foam (e.g., styrofoam).
• Any article that is encased in a soft-sided pack (e.g., poly bags and bubble mailers) that exceeds
  18 inches along its longest side or 14 inches along its second-longest side or 6 inches in height.
• Any package with an outer shipping container covered in shrink wrap or stretch wrap.
• Any package bound with metal, plastic or cloth banding, or that has wheels, casters, handles
  or straps (including packages where the outer surface area is loosely wrapped or where the
  contents protrude outside the container surface).
• Any cylindrical-like item, including but not limited to barrels, buckets, cans, drums, mailing tubes
  or pails.
• Any package routed through UPS’s irregular package sortation process, including but not limited
  to packages 1 inch or less in height.
• Any other package that requires special handling, as determined by UPS at its sole discretion.
• Applies per package for both domestic and international services.
• For a package that meets multiple criteria listed above, only one Additional Handling charge will be assessed, in the following order: Weight, Length plus girth, Length, Width, and Packaging.
• An Additional Handling charge will not be assessed when a Large Package Surcharge is applied.

OverMax Surcharge: 

Packages above the following limits are subject to surcharges from UPS: 

• Packages with an actual weight of more than 150 pounds
• Packages exceeding 108 inches in length
• Packages exceeding a total of 165 inches in length plus girth [(2 x width) + (2 x height)] combined, as measured to determine their billable weight

UPS reserves the right to return packages above these limits to the shipper at the shipper’s expense. The over-maximum limit surcharge starts at $$1,150 per package.

 

Please refer to UPS for additional information and fees associated with UPS-specific surcharges here.

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To learn about strategies for bypassing certain surcharges, feel free to consult our article: Tips to Avoid Shipping Surcharges