FedEx and UPS surcharge changes taking effect this month could increase expenses for shippers with larger packages, parcel pricing experts say.
On Jan. 12, FedEx expanded its assessment for determining which shipments will incur a dimensional additional handling surcharge or an oversize charge.
The carrier has added a cubic volume criterion to the dimensional fee, stacking on top of its existing assessments. Any package exceeding 10,368 cubic inches — determined by multiplying the length, width and height in inches — will be assessed the surcharge.
As for the oversize fee, FedEx has added both a cubic volume and a weight criterion on top of existing length and girth assessments. The oversize charge will apply to any package over 17,280 cubic inches or exceeding 110 pounds.
UPS will have similar changes take effect starting next Monday, per its website. Domestic packages with a cubic size over 10,368 cubic inches will face a handling charge from UPS. Packages with a cubic size greater than 17,280 cubic inches or in excess of 110 pounds will be subject to the carrier's domestic large package surcharge.
Comparable FedEx, UPS fees for large packages
| Carrier | Fee | Charge (low end) | Charge (high end) |
|---|---|---|---|
| FedEx | Additional Handling Surcharge – Dimension | $29.50 | $40.75 |
| FedEx | Oversize Charge | $255 | $330 |
| UPS | Domestic Additional Handling Charge (Cubic Size) | $30 | $40.50 |
| UPS | Domestic Large Package Surcharge (Commercial) | $219.50 | $286 |
| UPS | Domestic Large Package Surcharge (Residential) | $254.50 | $331 |
Note: Charges vary based on distance shipped.
The changes mean some packages that would have been able to dodge the fee previously could incur additional charges, Paul Yaussy, head of parcel contract intelligence at Loop, said in an interview with Supply Chain Dive. For example, a shipment measuring 46 by 24 by 16 inches previously would have avoided the oversize or large package charge, but under the new rules, the fee would apply, he added.
"I think there's going to be a ton of shippers that get really caught off guard with this one," Yaussy said.
Businesses shipping lightweight packages that take up significant space will be most affected by the change, according to an analysis by logistics intelligence company Sifted. It could also particularly hurt the bottom line of customers whose packages are at risk of shifting from an additional handling charge to the significantly pricier oversize fee, Mingshu Bates, AFS Logistics' chief analytics officer and president of parcel, said in an interview. For one client, "their total cost tripled from this one change," she added.
Affected shippers have ways to ease the sting, according to Bates. They could push to negotiate lower surcharges from the carrier, or adjust their packaging size to avoid triggering the fee.
"If you're selling certain things, you have to pay attention to the box size," Bates said.
