UPS to Hike Oversize Package Fees – Adds New Audit Fee

Image: UPS | Sorting Facility Scanner Tunnel
Image: UPS | Sorting Facility Scanner Tunnel
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Shippers using UPS may want to take note of a mid-year rate change the company announced.

Effective June 4, UPS will increase the fee for Over Maximum Limits and the Oversize Pallet Handling Surcharge by $150. This raises an existing fee from $500 to $650.

The good news is that unless a shipper sends big items like refrigerators or kayaks, this should not impact the average eCommerce sellers.

“It’s not a revenue-generating charge, its something we have increased regularly over time to encourage customers to ship through the UPS Freight network for these over max items.”

UPS spokesman Glenn Zaccara via Reuters

And UPS is considering offering a new service with a trucking partner to offer a solution for bulky goods that do not use their parcel logistics operation which really isn’t designed to handle such freight-like shipments.

READ MORE: UPS Considering Delivering Bulky Goods

Shipping Charge Correction Audit Fee

Also effective the same day, UPS will introduce a new Shipping Charge Correction Audit Fee.

The Audit Fee will be assessed if the average shipping charge correction in an invoice week is more than $5.00.

This new fee will be the greater of $1.00 per package subject to a shipping charge correction or 6% of the total amount of shipping charge corrections during the applicable invoicing period.

At issue with this fee is still a practice by some shippers who use incorrect dimensions when creating labels on shipments.

Some shippers seem to still have the hope against hope that somehow UPS will not catch dimensional weight shipments. Shipments subject to dimensional weight rates instead actual weight rates are lightweight products shipping in a large box.

Many years ago, shippers would enter 1″ x 1″ x 1″ for the box size on a package weighing a few pounds. But in reality, the package was much larger such as 8″ x 8″ x 36″ which in UPS’ case should be rated at 17 lbs for U.S. domestic ground shipments.

Note: Try this free dimensional weight shipping calculator from ShippingEasy to see the impact of dimensional weights on lightweight shipments.

As can be imagined, a shipper with many such shipments could save a lot of money per month as long as the shipment was not being re-rated by UPS.

And many years ago, shipments were only audited occasionally by UPS employees in sorting facilities using an actual measuring tape.

Technology has taken over this job, and today virtually all shipments run through scanners that weigh the package and laser scan the dimensions of the package.

Frequent shippers will be familiar with invoice rate adjustments on such shipments. But until this June, these rate adjustments were free.

Impact on Shippers

By charging an Audit Fee, UPS is effectively demanding that shippers correctly label their boxes and will now punish shippers who enter deliberately or by accident incorrect dimensional information.

It is a bit of a mystery why UPS decides to charge for adjusting shipping rates on a package when they use technology to verify the actual weight and dimensions and then bill the shipper according to the corrected weight.

Certainly, rerated shipments on invoices may trigger customer service calls as shippers argue the adjustments. Is this fee designed to pay for these customer service calls?

Review Packaging

With only a few weeks left before this new fee potentially will be added to UPS invoices, it is time for shippers to look at their invoices and identify possible problem packages.

Are all the dimensions of all boxes being used correct? Have any products that ship in the original box been adjusted in an inventory system or on eBay listings to reflect the actual size.

With free shipping being the de facto norm, how often have shippers looked at rate adjustments assuming they are legit and since it really didn’t matter, just ignored them?

Being “lazy” may cost a merchant money, so it’s time to review products and packaging and make sure that the label being created reflect the actual weight and dimensions to avoid the additional charge.

READ MORE: UPS Considering Delivering Bulky Goods

But Wait – There’s More!

Last October UPS announce other new charges that will go into effect on July 8, 2018.

• The Large Package Surcharge for any U.S. Domestic package delivered to a residential address will be $90
• The Additional Handling surcharge for any U.S. Domestic package exceeding 70 pounds in actual weight will be $19.00

Again, the same recommendation here. Time to review packaging and make proper adjustments to either charge customers for such oversize shipments or find a different shipping solution that can handle these shipments for less.

What do you think about UPS making this rate changes in the middle of the year? How will they impact you? Head over to our Facebook Discussion Group or use the comments section below.

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