UPS has been on a mission to eradicate undesirable freight. Specifically targeting larger, heavier and oversized packages that do not align with their shipping network. As you can imagine, these large and heavier packages consume more of their time, space and most importantly, their profits. To make up for the additional work and overhead needed to handle these unwanted shipments, UPS has significantly increased the fees associated with handling them. The fees most affected include Additional Handling, Large Package and Over Maximum Limits. If you ship large and heavy packages, be prepared to see your shipping costs rise significantly in 2018 and beyond.
Additional Handling Fee has increased by 10.6% in 2018, jumping to $12. This $12 surcharge is applied to packages in several instances:
- If your packages’ longest side exceeds 48 inches
- If your package has an actual weight greater than 70 pounds
- Any article that is encased in an outside shipping container made of metal or wood
- Any cylindrical item, such as a barrel, drum, pail, or tire, that is not fully encased in a corrugated cardboard shipping container
- Each package in a shipment where the average weight per package is greater than 70 pounds and the weight for each package is not specified on the source document or the UPS automated shipping system used
Large Package Surcharge – For domestic shipments, UPS defines a “Large Package” when its length (longest side of the package) plus girth [(2 x width) + (2 x height)] combined exceeds 130 inches and is less than 165 inches, or its length exceeds 96 inches. With the exception of UPS Ground with Freight Pricing packages, Large Packages are subject to a minimum billable weight of 90 pounds, in addition to the Large Package Surcharge.
How much is that Large Package surcharge? In 2018, you will now be paying $80 for any package that is deemed a Large Package by UPS, a 14.3% increase from 2017. Your package will also be up-charged to a minimum billable “90 pound” shipment (ouch!).
Unfortunately, for shippers, that is only the first wave of increases for large and heavy packages in 2018. UPS announced there will be a secondary rate increase to Additional Handling and Large Package fees, taking effect on July 8, 2018.
The Additional Handling charge as of July 8, 2018 for any U.S. Domestic package, exceeding 70 pounds in actual weight, will increase from $12.00 to $19.00 per package. Remember, it was only on December 24, 2017, that UPS increased the Additional Handling fee from $10.85 to $12.00. Your pricing has almost doubled in a six-and-a-half-month span.
Furthermore, a Large Package Surcharge for US domestic shipments, delivered to a residential address, will increase to $90 in July; it was only on December 24, 2017, that UPS raised this fee from $70 to $80, increasing the total cost by $20 in the same six-and-a-half-month span (a 28.5% increase). The drastic increases in Additional Handling and Large Package fees this year is a confirmation that carriers are trying to get shippers to change their shipping method or pay the price.
UPS is not done there. Let’s not forget about the Over Maximum Limits Surcharge, which increased by a whopping 233% in 2018 to $500 per package (yes, you read that correctly). Packages that exceed 108 inches in length or when its length (longest side of the package) plus girth [(2 x width) + (2 x height)] combined exceeds 165 inches or packages with an actual weight of more than 150 pounds are not accepted for transportation in the UPS small package system. These packages are subject to an Over Maximum Limits surcharge of $500, in addition to all other applicable charges, if found in the UPS small package system.
We have already noticed several instances where UPS took advantage of these increases, in particular, with the Over Maximum Limits fee. The below example is a scenario we have seen far too often between a shipper and UPS.
The shipper manually entered their box size of 33x30x30 into the UPS shipping software. The total length and girth combined of this package equates to 153 inches which means this package would have been charged with the additional Large Package surcharge of $80, which the customer was prepared for. When UPS received this package, their scanners measured the same exact box as 40x34x30. With these new box dimensions, the total length and girth combined of this package is now 168 inches.
33 + plus girth [(2 x 30) + (2 x 30)] = 153 inches (Large Package Surcharge)
40 + plus girth [(2 x 34) + (2 x 30)] = 168 Inches (Over the Maximum Limits Surcharge)
Why is this significant? This package now exceeds the 165-inch threshold and now qualifies as an Over Maximum Limits package. That $80 Large Package surcharge the shipper was prepared for just turned into a $500 Over Maximum Limits surcharge. This is a 525% increase! I am sure we have all heard the cliché saying, “It’s a game of inches” and it seems like UPS is playing a game of inches now. As this example illustrates, a couple of inches one way or the other can have significant consequences on your small parcel spend.
The drastic increases in Additional Handling, Large Package and Over Maximum Limits fees in 2018 is proof that the carriers are getting smarter and hitting the shippers where it hurts the most.
For more information, contact us at 631-844-9500 or email kenwood@myLJM.com.