In April, UPS and FedEx have added new delivery fees in a number the most populous cities in the U.S. Known as a delivery area surcharge (or DAS), the range of fees from both companies is between $3.95 and $5.85 with possibly higher rates for ZIP codes considered “remote” or “extended.”
- The primary cities impacted are Los Angeles, New York, Chicago, San Francisco and Boston.
- In total, 82 ZIP codes have been affected.
- Surcharges will vary depending on whether it is a ground or air transportation and whether it’s a commercial or residential delivery.
How To Avoid (Or Mitigate) Surcharges
With both shipping giants adding these DAC fees in the same month, it will be difficult for businesses sending goods into these large cities to avoid them.
- Among other motivations, it is likely that both FedEx and UPS are attempting to offset the costs of tolls associated with tunnels or bridges that are common in more populated cities.
Whatever the reason, it can be an immediate headache for businesses that have grown used to being able to plan for increases in shipping costs based on annual rate adjustments.
DAC fees may represent a costly increase in the price of business depending on the number of packages a company is sending into affected area codes.
- While it may take a reorganizing of logistics, it is worth considering consolidating packages heading to the same address into fewer shipments if and when possible.
- This would require communicating with the recipient about the possibility of negotiating an agreed upon day to receive larger volume orders rather than splitting that amount over multiple shipments.
FedEx is a Business Services Member of PPAI and has been supporting the Association and its members since the early 2000s.
- This partnership results in exclusive member discounts with the carrier, including 35% off residential and area surcharge fees, which will help offset the new DAC fees when shipping into the affected area codes.
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PPAI Members interested in enrolling into the discount program should contact their account manager for enrollment information.
Published with Permission from PPAI
