FedEx and UPS Discounts: Negotiate Accessorial Fee Waivers

Rich Harkey

June 03, 2011

Accessorial fees refer to shipping costs that are additional to the base transportation charge. These charges seem to go up every year with new ones being added constantly. Recent fuel service charges for FedEx and UPS recently shot up a "wallet-emptying" 25 percent. Accessorial surcharges for extra, supplemental or special services can easily account for up to 40 percent of your overall freight costs. It's important to perform a FedEx audit or a UPS audit using a knowledgeable shipping auditor, which can help you manage these costs.

A shipping auditor will tell you that in 2011, both FedEx and UPS accessorial charges rose even substantially. In fact, they were some of the largest increases in the carriers’ history:

FedEx Accessorial Charge Increases:

• FedEx Delivery Area Surcharge up 8.9 percent ($1.85 vs. $1.70)
• FedEx Residential Area Surcharges up 10 percent ($2.75 vs. $2.50)
• FedEx Extended Area Surcharge up 9.1 percent ($3.00 vs. $2.75)
• FedEx Indirect Signature Required up 14.3 percent ($2.00 vs. $1.75)

UPS Accessorial Charge Increases:

• Up 11.36 percent for Residential Surcharge Ground
• Up 10 percent for Residential Surcharge Air
• Up 9 percent for Extended Delivery Area Residential Surcharge
• Up 8.82 percent for Extended Delivery Area Commercial Surcharge

Your shipping auditor can help you determine which accessorial charges--residential surcharges, delivery area surcharges (DAS), fuel surcharges, weekly service fees, and other handling charges--most impact your shipments. Whether you perform a UPS audit or FedEx audit, you'll find that there are over 100 of these accessorial charges, and they often comprise roughly 30 percent of your overall shipping costs. Your shipping auditor can help you negotiate with your carrier for waivers or reductions (yes, they are negotiable, no matter what your carrier reps tell you). The key is to target specific discounts and concessions.

Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry.

As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts.

Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results.