Price hike Archives | Lateshipment.com

How to Reduce the Impact of Oversize Charge on Shipping Costs

Joelah James — Mon, 27 Jun 2022 15:50:42 +0000

Shipping is an expensive part of any ecommerce business. Therefore, it is wise to cut corners wherever you can to save on costs and grow your business. However, that may not be as easy as it sounds.

Your shipping bills can contain additional expenses over existing shipping fees that can put a dent in your wallet and deter your plans to save on shipping costs.

One of such expenses is an oversize charge, which unfortunately is a common expense for businesses dealing with particularly large products such as pianos, washing machines, refrigerators, etc to name a few.

With the right optimization techniques, businesses dealing in large goods can reduce the impact of oversize charges. But first, let’s understand the basics.

What is an Oversize Charge?

An oversize charge is a surcharge levied on packages that exceed the carrier’s permitted weight. This charge is applied to the package’s actual weight or dimensional weight, whichever is higher.

Major carriers such as FedEx and UPS treat oversized packages differently according to their own calculation and nomenclature.

FedEx Oversize Charge

A FedEx Oversize Charge is applied to packages that exceed 96 inches in length or 130 inches in length and girth.

As we mentioned, the surcharge will be based on the greater of the package’s actual rounded weight or dimensional weight with 90 lb as the minimum billable weight.

FedEx also suggests that the package shape and dimensions may change during transit, affecting the package’s dimensional weight and surcharge eligibility. In such cases, FedEx may make appropriate adjustments to the charges at any time.

UPS Large Package Surcharge

A Large Package Surcharge is applied to each UPS package when its length plus girth [(2 x width) + (2 x height)] combined exceeds 300 cm but does not exceed the maximum UPS size of 400 cm.

Large Packages are subject to a minimum billable weight of 40 kg in addition to the surcharge itself.

UPS does not apply an Additional Handling charge when a Large Package Surcharge is levied.

Catching up with the Price Hike for Oversize Charges in 2022

If these surcharges don’t worry you enough, keep in mind that FedEx and UPS increase the rates of these surcharges YoY. Not to forget the additional peak surcharge during the holiday season.

In 2022, both FedEx and UPS increased the rates of their services by an average of 5.9%. This applies to oversize and large packages as well, making you, the retailer, feel the brunt end of the price hike.

Here’s a quick rundown of the FedEx and UPS Oversized and Large Package price hike.

FedEx price hike for Oversize Charges in 2022

As of January 24, any packages sent under FedEx Express and Ground services will cost a minimum of $110 to a maximum of $145 (which was $105 in 2021) based on the designated FedEx zone of the destination.

Similarly, FedEx Home Delivery will cost anywhere between $135 to $170 from a common $130 for all zones in 2021.

That’s not all! Oversize Packages under International Express and International Ground services will now cost $145 per shipment, a significant increase over $105 the previous year.

UPS price hike for Large Package Surcharge in 2022

Just like FedEx, UPS too has increased the rates for Large Packages with effect from December 26, 2021.

Commercial packages that are considered large and oversized can cost you between $110 to $140 based on the zone under which the destination is marked.

Residential packages, on the other hand, are even more expensive and can cost you between $135 to $165, with an increase of $10, $15, and $20 based on the respective zones.

While this rate change did not come as a surprise to many, it shows shipping carriers’ stand on oversized packages. They have made it downright difficult for shippers to ship heavier items without paying a pretty penny.

What Do Oversize Charges Mean for Your Business?

While retailers are still coming to terms with the effect the price hike will have on their margins, those who deal with furniture, gym equipment, mattresses, home appliances, etc are worried even more. These particular retailers will now have to come up with other inventive means to make up for the loss.

Shipping carriers would no doubt get the better end of the deal when such products are shipped. But, the main motive behind the rate hike seems to be the need to compensate for their significant losses due to COVID-19 without regard for ecommerce businesses, who went through the same ordeal.

However, all things considered. There are still ways for your business to make sure that the damage as a result of Oversized Packages surcharges and regular increases in their rates is trivial.

What You Can Do to Minimize the Impact of This (Significant) Hike

Try renegotiating the terms of your contract with your shipping carrier (in this case FedEx or UPS) and work out a cheaper alternative if you are a bulk shipper.
Consider choosing Freight services if your profit margins are affected too much (delivery usually takes 4-6 business days).
If the alternate service options aren’t working out, you could consider shipping with other carriers who can accommodate oversized packages at better rates.
If the product consists of various parts that could be divided and shipped, then you could dismantle it and then send it. This would work with automobile parts, electronics, gym equipment, furniture, or bikes.
In the case of mattresses, investing in compression boxes or packaging might be a tad more cost-effective than paying the oversize price.

How Lateshipment.Com Can Help

Does your company have an issue with oversized packages? Many shippers really have no idea of what they are paying for when they pay an invoice from their shipping carrier.

In this case, LateShipment.com can help you reduce your shipping costs from additional expenses such as Oversized charges.

Firstly, LateShipment.com helps you regularly audit your shipping invoices and claim eligible refunds to recover up to 20% of your shipping cost.

Apart from delivery issues, this also includes incorrect surcharges and billing errors such as duplicate entries and complex DIM weight errors, helping you save up to $170 per package in 2022.

That’s not all! We can also help you renegotiate your contract with your shipping partner.

LateShipment.com provides you with carrier performance reports that let you dig deeper to uncover gaps, know where you’re seeing profits, and review areas where you’re not.

The reports equip you with good data while renegotiating contracts with shipping carriers and can help things work in your favor.

Not just that, keeping a close watch on carrier performances and claiming regular refunds also ensures better service quality by your shipping carriers.

In conclusion, LateShipment.com’s automated Parcel Audit and Refunds solution can help you with these Oversized Charges and Large Package Surcharge with FedEx and UPS respectively.

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What the recent FedEx price hike means for retailers

Joelah James — Mon, 27 Aug 2018 13:52:48 +0000

By now, you’d have heard about the FedEx price hike for Additional handling and Ground Unauthorized surcharges. Effective since September 3, this recent hike comes right on the heels of the January price hikes for additional handling, oversize and ground unauthorized surcharges, third party billing, and FedEx Freight over length surcharge. When carrier rates have been rising left, right and centre, this news can have a major effect on the bottomline of small business owners who have a niche customer pool.

What’s new with this surcharge?

As per this recent FedEx price hike, the additional handling charges for packages weighing more than 70 lbs will increase from $12 to $20. The same will apply for international express package services.

The ground unauthorized package charge will increase from $300 to $675.

What this means for retailers

This hike will be a disadvantage to several shippers, say for instance furniture or automobile retailers. These rate increases specifically target niche shippers who ship heavy or oversized products. This highly minimizes the impact (as it is aimed at only specific industries), and shipping carriers get to escape the brunt of the backlash that is usually inspired by such sudden price increases. If there are around 100 shipments in transit, and a few of them get damaged or unevenly distributed, the change in dimensional weight is inevitably billed to the shipper.

The irony is that shipping carriers try to penalize customers for mistakes, while they do not own up to their own mistakes and offer automated refunds for service errors.

In many cases, the mistake in dimensional weight billing lies on the carrier’s side but is slapped onto the customer and billed to his/ her invoice. It’s high time shipping prices became transparent and these unfair pricing policies came to an end.

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10 Important Shipping Carrier Errors That Could Cost Your Ecommerce Business

Revathi Karthik — Thu, 31 May 2018 16:25:56 +0000

Have you looked at your FedEx or UPS invoice lately? Shocked to find your shipping costs at an all-time high? The reality is that FedEx and UPS have slapped a 4.9% shipping rate hike (read more about 2018 shipping rates) forcing merchants to rework their shipping strategy. While retailers are still weighing up the domino effect of these new rates on their bottom lines, they often overlook claiming the money that they are entitled to. Shipping carriers often commit errors in the form of service failures or invoicing mistakes that amount to around 20% of your shipping costs. A deeper inspection of your shipping carrier invoice could reveal numerous hidden money-back spots. However, these errors occur randomly making it a painstaking process for businesses to identify them let alone dispute them.

Luckily, you don’t have to embark on this scavenger hunt alone. At LateShipment.com, we automatically audit your shipping invoice for over 50 carrier errors and recover refunds that are directly applied to your shipping invoice.

Here is a snapshot of the ten most expensive shipping carrier errors that are eligible for refunds

Delayed Deliveries – Sample this: You are a wine retailer who has had a merry sales season. Just when you are toasting your big wins with that chilled Chianti, you are interrupted by a distressed call from your customer. As luck would have it, his favourite bottle of chardonnay was going to arrive late. To keep him happy, you speed deliver another bottle, it’s Christmas after all! But then you get another call and then another. Before you realise, you are flooded with order delivery complaints and end up spending the better part of your holiday salvaging delivery disasters.

The real cost of late delivery is a disjointed customer delivery experience and losing repeat buyers. One harrowing delivery experience could get you blacklisted by even loyal customers.

Damaged shipments – True, when an expensive order is found to be damaged, it causes a dent in your profit margin. But far greater is the resulting negative impact it has on a customer’s brand perception.

Lost Shipment: The message on your customer’s tracking page reads: Delivered to the front porch. When your customer enquires about the package whereabouts, with casual indifference, you quote the delivery status update. Surprise! They don’t even have a front porch.

Lost shipments could turn out to be devastating for retailers and their customers alike. Especially when they are marked as delivered by the shipping carrier.

Residential surcharges: There is a fee applied to packages that are shipped to non-commercial addresses. But what exactly is considered as a non-commercial address? UPS states that a residential surcharge would be applied whenever a package is shipped to any address that is a house and does not have an entrance open to the general public. Let’s say you’ve got an artistically designed, quaint office with a side entrance and a carefully camouflaged garage- it’s quite possible that residential charges will get applied even if it’s situated in the middle of a bustling city.

Address correction charges: Instances of packages delivered to wrong addresses are aplenty. Agreed, the address could be incorrectly mentioned on the package by the shipper. That still does not absolve FedEx or UPS of taking responsibility when packages are delivered to wrong addresses. Nobody wants their brand new purchase sitting on somebody else’s doorstep.

Dimensional weight pricing: When you ship a 3 tier cake or a pound and bench toy that weighs less than 6 lbs, how much do you pay? You may have to pony up the charges for a 13 lbs package. Dim weight pricing is one of the trickiest charges to calculate. Finding an optimal package size for orders remains a challenge for retailers. Pad it, you pay extra. Skimp on the cushion, you face unhappy customers. Adding to worries of a toppled cake, is an application of incorrect DIM weight charges.

Void shipments: Remember those labels that you created but never used? They generally account to about 0.22% of total packages. At an average cost of $5 per shipping label, cancelling unused labels could recover a significant amount, especially if your shipping volume is quite high.

Delivery area surcharges and extended delivery area surcharges: Did you know an additional fee is applied every time a package has to be delivered to residential, rural or commercial rural area? Packages tagged under DAS are charged a $4 – $4.5 whereas those tagged as eDAS are charged a whopping $130-$150. Even more appalling is the fact that there is a good possibility that 20% of your ecommerce orders fall under either of these categories.

Fuel surcharges: The most contentious and least surprising fee applied to a shipping invoice has been fuel surcharge for all service types including ground shipments. Adding to the complexity of validating your invoice charges, fuel surcharges keep fluctuating on a weekly basis.

Duplicate charges: Is it possible to bill a tracking number twice? Tracking numbers theoretically are unique. But in practice, the same tracking number could be assigned to two different orders. Although straightforward and low in occurrence (.07%), depending on the charges that are duplicated, the amount you could save from auditing for duplicate charges could be significant.

Image source: Disneyinstitute

Inspecting each shipping invoice and searching for errors is like playing catch blindfolded. You have no clue where or when you are likely to bump into an error. An automated auditing process, on the other hand, could systematically catch all possible errors and request refunds on your behalf. All you have to do is, say the word: “Audit”! ( And of course follow it up with a 2 minute sign up process with LateShipment.com)

Credits

https://parcelindustry.com

https://ecommercenews.eu/primary-reason-orders-dont-arrive-time/

All charges mentioned are as published by FedEx/UPS

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