4 Shipping Surcharges That Are Costing You Big Money

by | May 30, 2019

3 min read


While surcharges may seem insignificant individually, they quickly add up. For FedEx customers, 28% of shipping charges are surcharges, according to a recent report by Shipware.

It is critical that anyone who ships understands what surcharges to look out for and how VeriShip can help eliminate those unnecessary expenses.

Surcharge #1: Dimensional Weight

To calculate a package’s dimensional (DIM) weight, a carrier takes the volume of a package (LxWxH) and divides it by the DIM factor (standard is 139) to find its billed weight. If that billed weight is heavier than the original weight of the package the carrier will charge based off of the heavier weight, therefore causing the package to cost more.

DIM weight charges are a sign that you are either shipping light products or you are packing your products inefficiently. While you may be unable to change the type of product you are shipping, you can always aim to increase the efficiency of your packing.

VeriShip’s DIM analysis shows you what percentage of your current packages have been subject to dimensional weight pricing and allows you to track your progress over time to identify if changes have worked or if further contract changes are needed.

Surcharge #2: Late Payment

If you make a payment late to your parcel carrier, you will incur a late payment fee. These fees are both frustrating and 100% avoidable.

Many companies aim to eliminate late payment fees by paying off their invoices as soon as they receive them. While this certainly helps with late payment fees, it makes reconciliation and getting refunds challenging. If you pay your invoice before your audit is complete, you’re agreeing to forfeit any potential refund.

VeriShip’s Parcel Pay aggregates your audited invoices, automatically collects your payments, pays the invoice at the optimal time on your behalf and creates files for your accounting needs. By streamlining the payment process, VeriShip takes away the added stress that comes with paying your shipping bills, while ensuring you receive the maximum refund owed..

Surcharge #3: Address Correction

The address correction surcharge is applied to your invoice anytime your parcel carrier has to fix an incomplete or incorrect address.

You can understand how this charge impacts your shipping costs by using the VeriShip Intelligence Platform (VIP).

The VIP displays surcharge insights that will provide a quick glimpse into the costs the carrier is applying to your package after it leaves your location. In addition to this valuable data, the VIP also allows you to set package-level alerts so you can be notified whenever a particular surcharge occurs.

Surcharge #4: Residential Delivery

The VIP can also help your business understand how the residential delivery surcharge is impacting your bottom line. This surcharge is applied when your parcel carrier delivers to a residential address, even if a business is being run there or the address has been rezoned for commercial use.

In addition to residential deliveries and address corrections, the VIP will also give you insight to other surcharges such as delivery area, collect on delivery and Saturday pickups.  By taking advantage of all of VeriShip’s services, your business can maximize savings and ensure that surcharges aren’t costing your business more money than necessary.