Navigating Accessorial Charges: Understanding the Complexity of FedEx and UPS Invoicing
Businesses rely heavily on shipping carriers like FedEx and UPS to transport their products to customers. While these carriers offer a wide range of shipping options to cater to various needs and budgets, their pricing structures can be difficult and daunting to understand. Accessorial charges are a critical pricing element that can substantially increase the overall cost of a shipment. In this article, we will explore the different types of accessorial charges that FedEx and UPS impose and emphasize the significance of auditing invoices to ensure shippers are accurately billed.
What are Accessorial Charges?
Accessorial charges are fees charged by shipping carriers for services beyond standard pick-up and delivery. These charges are added to a shipment’s base rate and can include anything from additional handling fees to delivery surcharges for certain types of locations.
Types of Accessorial Charges:
The list of accessorial charges can be extensive, and it can vary depending on the carrier and the specific service being used. Here are some of the most common types of accessorial charges imposed by FedEx and UPS:
- Address Corrections: These fees are imposed when a package’s destination address needs to be corrected, either because of an error by the shipper or the carrier.
- Delivery Area Surcharge: This is a fee that’s added to a shipment’s base rate for delivery to certain locations that are considered “remote” or difficult to reach.
- Additional Handling: This fee is added when a shipment requires special handling, such as being particularly large or heavy.
- Fuel Surcharge: This is a fee that’s based on the fluctuating cost of fuel and is added to the shipment’s base rate to cover the carrier’s fuel expenses.
- Residential Delivery: This is a fee that’s added to the shipment’s base rate for delivery to a residential address rather than a commercial one.
- Saturday Delivery: This is a fee that’s added to the shipment’s base rate for delivery on a Saturday.
Why Audit Invoices?
With so many accessorial charges to navigate, it’s not uncommon for shippers to be overcharged on their invoices. In fact, as much as 5% of invoices from shipping carriers have errors. These errors can be costly, particularly for small businesses that operate on tight margins. Auditing invoices can help shippers identify errors and ensure that correct discounts have been applied. This can save businesses money and help them better manage their shipping costs.
Accessorial charges are a critical factor in shipping carrier pricing structures, and it is crucial for shippers to comprehend the various types of charges and how they can affect shipment costs. By conducting invoice audits, shippers can verify that they are not being overcharged and that they are receiving accurate discounts. This can enable businesses to effectively manage their shipping expenses and operate more efficiently.