Running a small e-commerce business means shipping is more than a line item — it’s a core part of your customer experience and your margins. But the base rate you see when you print a label is only the start. FedEx, UPS, and USPS all apply service fees (surcharges) that can add 20-40% or more to your total shipping cost if you’re not prepared.
For FedEx and UPS, surcharges are widespread and tied to the shipment’s characteristics:
-
Fuel surcharge — fluctuates with fuel markets and applies to nearly every service.
-
Residential delivery — added when the destination isn’t a commercial address.
-
Delivery area surcharge — common for rural or remote ZIP codes.
-
Dimensional (DIM) weight pricing — large-but-light packages are rated by size, not weight.
-
Oversize / Additional Handling — applied for heavy (typically 50-70 lb+), bulky, or irregular parcels.
-
Signature service fees — required for high-value goods or age-restricted products.
-
Address correction — if the address is incomplete or inaccurate.
The USPS keeps pricing simpler, which makes it attractive for smaller merchants. Ground Advantage and Priority Mail usually include fuel, residential delivery, and Saturday delivery in the base price. Still, USPS can add Nonstandard Fees for longer or awkwardly packaged parcels, plus forwarding/return fees when customers move or refuse delivery.
Audit shipments monthly, especially DIM weight charges. Calculate all the fees tied to your average shipment, and then all you shipments - it’s essential to understanding your cost per order. Negotiate when using FedEx or UPS. Even modest discounts help. Optimize packaging to reduce size-based fees, and use shipping software to preview surcharges in real time.
By
·
1 minute read