All Things Shipping | May 14, 2020

The Basics: How to Save on UPS Surcharges

Jim Kazliner

Shippo Snippets:

  • Shipping expenses are a top challenge for 75% of businesses
  • UPS adds a surcharge for any packages that need additional or special handling
  • The less work you make for UPS to ship your package, the less likely you’ll have to pay a UPS surcharge

The Story:

As we navigate the current state, one aspect that’s potentially the most concerning is the uncertainty of it all. There’s info coming from everywhere, but at the end of the day, no one knows for sure what will happen next. One way to work through all of this is to focus on the things you can control. If you run a business, there are ways you can help minimize surcharges and other expenses to ultimately help you come out of this period stronger. 

E-commerce shipping expenses can be a costly line item for any e-commerce company. In fact, shipping expenses are a top challenge for 75% of online retailersAnd when you get dinged with those vexing, but often preventable surcharges, it can get significantly more expensive.

But, there are ways to cut down on shipping costs and surcharges, and keep more of your revenue to reinvest in future business growth. It starts with understanding what your shipping charges are and how they break down. If you get down to it, you’ll see that many carriers charge extra fees and surcharges for various categories. UPS is no different. 

Here, we’ll go over UPS surcharges and strategies you can employ to avoid them.

Label E-commerce Shipping Packages Accurately

Insufficient postage surcharges such as underpaid or short-paid postage happen when you haven’t paid enough to cover the postage on your package. UPS will not only adjust the shipping, but they’ll also add a surcharge to each instance.

That’s why it’s important to make sure your packages are labeled correctly and that all information is accurate and up-to-date:

  • Weight: If you have a package that weighs 6.1 pounds, make sure that you accurately record 6.1 pounds instead of rounding down to 6. If you have to use a whole number, it’s best to round up. UPS will apply a handling surcharge if “the weight for each package is not specified on the source document or the UPS automated shipping system used.”
  • Size: Shipping fees are impacted by both weight and dimensions, so you need to enter this information as well. Remember: when in doubt, round up. 
  • Address: Make sure all details are correct, including name, street name, house number, unit number, city, state, zip code, and even phone number. 

The less work you make for UPS to ship your package, the less likely you’ll have to pay UPS surcharges. 

Keep It Simple

UPS adds a surcharge for any packages that need additional or special handling. Here are some parameters to help you avoid related surcharges: 

  • Packages should weigh 70 pounds or less 
  • Packages should not have dimensions greater than 48 inches on its longest side 
  • Packages should not have dimensions greater than 30 inches on its second-longest side. 
  • Items should be fully encased in corrugated cardboard 
  • Avoid cylindrical types of shapes

Note: You can exceed the above weight and dimension limits if you ship as a Large Package. However, these are limited to 150 pounds and 108×165 inches, and these packages would be subject to UPS’s Over Maximum Limits surcharge. 

Location, Location, Location

Another UPS surcharge is the fuel surcharge. This is assessed depending on both how your package is shipped and how far it has to travel

If you have multiple locations or warehouses, try to structure your inventory strategically so that you’ve got coverage in each location, especially if located with some distance between them. Packages from a warehouse in California have a lot further to travel to reach a customer in Connecticut compared to those originating at a New York warehouse location. Fewer miles to travel means reduced fuel surcharges. 

Choose a Shipping Software Solution

While fuel surcharges and residential delivery surcharges might seem unavoidable in many cases, you can actually minimize or even eliminate them if you choose the right e-commerce shipping software. One of the many cost-saving benefits of shipping with UPS via Shippo is that some of these common charges are waived. 

Businesses that use Shippo have access to UPS shipping rates with a discount of up to 62% off, including various waived surcharges. 

Shippo provides several ways to simplify the UPS e-commerce shipping process:

  • Account creation: setting up an account can be done in a matter of minutes and will allow you to compare UPS rates within Shippo
  • With Shippo, you can pre-fill much of the required information based on your existing shipping info
  • By creating a UPS account through Shippo, you’ll get access to discounted rates, waived surcharges, and lower-priced pickups
  • Have an existing UPS account? No problem—existing UPS account holders can also access Shippo’s discounted rates by creating new accounts.

In-Store Fulfillment As an Option

UPS also has a surcharge that could apply for delivery to residential addresses. This may or may not always be the case, so it’s a good idea to check your monthly statement. To combat these charges, take advantage of the BOPIS trend, or “buy online, pick up in-store.” 

It’s predicted that 90% of physical retailers will offer BOPIS fulfillment by 2021. So if you or a wholesale customer have brick and mortar locations, offering in-store pickup may be beneficial for your bottom line. REI offers this service for any customer order, or shoppers can spend $50 to qualify for free home delivery. In some cases, this can be a win-win, as 37% of customers are also likely to purchase more in-store when they go to retrieve their BOPIS orders. 

Minimizing Peak Surcharges

While any business worth it’s salt would want to see steady sales all year round, when it comes to holidays or other retail moments, shipping and other related services tend to spike, especially as we hit the fourth quarter, and that could add extra expenses via UPS peak surcharges to your shipping program. 

Here are a couple of ways to encourage off-peak orders: 

  • Incentivize later deliveries. Offer free shipping, discounts, and other promos to shoppers who don’t mind receiving their purchase after the rush. To sweeten the deal, think about a virtual version of the gift that they can print or share with a loved one. 
  • Start your seasonal marketing campaigns early. Get your holiday orders in as early as possible. Put a deadline on holiday orders and remind customers at checkout that they need to place their orders by a certain date if they want it delivered in time for whatever holiday is on the horizon. 

While no one can say with absolute certainty what will happen next, focusing on what you can have a direct impact on—such as minimizing UPS surcharges—will help set you up for success on the other side of this challenging time.

Learn more about ways to save with Shippo’s shipping software >

Jim Kazliner was Shippo's senior content editor, creator, and overseer. His background spans business, retail, financial, and automotive sectors, as well as music and film journalism. When not spinning yarns on his long-suffering laptop, you’ll find him collecting vintage vinyl and obscure BMX bike parts.

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