Surcharges in parcel shipping
Parcel carriers levy additional surcharges to base transportation cost which depends on various operational and billing factors. These surcharges can contribute to as high as 35-40% of total shipping cost so understanding these surcharges can help you manage shipping costs more effectively. We have elaborated few most commonly levied surcharges as below.
Common Parcel Surcharges
- Fuel Surcharge: This surcharge is levied to transfer dynamic fuel costs to shippers. It is usually linked to a fuel index to track fuel spot prices, e.g. U.S. Gulf Coast Kerosene-Type Jet Fuel.
- Oversize/Overweight Surcharge: This additional fee is levied on packages that exceed standard size or weight limits set by the carriers in their respective service guides.
- Delivery Area Surcharge: This extra fee is charged for deliveries to remote or less accessible areas, which are located outside of the carrier’s standard service area or in remote regions.
- Residential Delivery Surcharge: This additional charge is for delivering to residential addresses rather than commercial locations, i.e. for deliveries to homes or non-commercial properties.
- Signature Required Surcharge: An additional fee for packages that require a recipient’s signature upon delivery. This is applied when the sender requests or the service requires a signature to confirm receipt.
- Saturday Delivery Surcharge: Carriers levy this extra fee for deliveries made on Saturdays. It is important to consider for the services that offer or require weekend delivery.
- Address Correction Surcharge: Fees incurred if the delivery address needs to be corrected or updated after the package is in transit, when an address error is discovered and requires adjustment.
- International Surcharge: Additional charges for shipping packages across international borders. It is applicable for shipments that cross national boundaries.
- Customs Duties and Taxes: These fees are imposed by the destination country’s government for importing goods. These are applied on international shipments, varying by country and product type.
Managing Surcharges
- Understand Carrier Policies: Familiarize yourself with the specific surcharges of the carriers you use.
- Use Shipping Calculators: Many carriers offer online tools to estimate total shipping costs, including surcharges.
- Optimize Packaging: Reduce size and weight to avoid oversize and overweight surcharges.
- Choose Delivery Options Wisely: Consider residential delivery and delivery area surcharges when selecting shipping options.
By being aware of these surcharges, you can better manage your shipping expenses and make more informed decisions about parcel shipping.