The Top Complaint About UPS and FedEx

What do you hate about your parcel carrier? The number one complaint about UPS and FedEx was accessorial charges. (Morgan Stanley Parcel Annual Best Practices 2009 Survey)

Accessorial charges are better known as surcharges, additional charges, ancillary fees, or adjustments. There are more than 90 of these add-on charges! Here is a link to the UPS 2010 Surcharge and Accessorial Price Increases.

The survey also found that in 2009, 11.5% of the overall transportation costs were for accessorial charges. What are these charges? Here are the top ten:

1. Fuel Surcharges
2. Address corrections
3. Residential delivery
4. Delivery Area Surcharges
5. Rural Area Surcharges
6. Dimensional charges
7. Saturday delivery
8. Declared value (insurance)
9. Additional Handling
10. Large Package

The big reason why businesses hate these charges is that most of these additional charges are not included in the published price and are added to your bill after you have shipped the package, making it difficult if not impossible to recoup from your customers. If you are processing your packages using technology, you have to correctly maintain your technology and enter all the data fields. As you may recall from my last blog entry, How Are You Losing Money in Shipping?, one of the reasons a client was losing over $100,000 a year in shipping because the person processing the packages was not entering the dimensions of the packages in the carrier’s shipping system.

How can this happen you wonder?

In this particular case, the problem was that my client had outsourced her shipping to a third party logistics company. I called them to find out why they were not entering the dimensions and was told that they didn’t do it because dimensional rating was only for air shipments, not ground. They are wrong! This was a company that bragged about their expertise in shipping packages that had been doing this for 30 years and they did not know that UPS and FedEx charge based on the dimensions of the package for ground shipments as well as air! Here is the link to how to compute a dimensional weight, A Quick & Easy Way to Calculate Dimensional Weight and also here is a link, Parcel Shipping Ain’t Easy, to a very funny video about it. My client was depending on an expert and the expert didn’t know that they didn’t know!

Survey Shows Many Companies Are Unaware Of Full Costs of Shipping

A recent Endicia® survey of more than 500 small businesses that sell goods online reports more than one third (34 percent) of the surveyed businesses do not know if their shipping provider has instituted a fuel surcharge. 

Here is what you need to know about fuel surcharges:

• A fuel surcharge is an additional fee that is added to the base shipping charge.
• UPS, FedEx, and DHL and many regional carriers impose a fuel surcharge on all their services.
• Fuel surcharges today are an additional 8.25% on ground shipments and 28.5% on international and air shipments.
• The US Post Office does not impose a fuel surcharge.
• The fuel surcharge also applies to accessorial charges, like residential delivery, rural area charges, etc…
• Many shipping systems, like WorldShip & Clippership, require the user to configure their software to add fuel surcharges.
• Fuels surcharges can change any time, so users have to monitor what the carriers are doing and change their system in order to have accurate rates.

In order to save on your shipping costs, the best advice I can provide is to compare services and prices amongst multiple carriers and make sure that the fuel surcharge is included.