Accessorial fees are the most confusing and misunderstood portion of your parcel shipping invoice, and for good reason—there are hundreds of them, and the carriers know “there is profit in confusion” …
Before you can optimize your shipping costs or simply just understand them, it’s important to know that accessorial fees and surcharges, like address correction fees, can amount to over half of your total cost of the shipment.
Address correction fees are a huge revenue generator for the carriers. There is no valid reason why the carriers continue to increase the charge related to address corrections, except for pure profit. It wasn’t long ago when there was no such thing as “address corrections,” as was the case with “fuel-surcharge” fees not that long ago.
Did you know an innocent typo or single digit off in a zip code can cost you a fortune when it comes to shipping charges?
Errors in the addressing process can cause shipping delays that negatively impact your customers and can greatly impact your business’s profits. Not entering the proper address for a shipping label will cost you $15.90 (UPS), $15 (FedEx), and voids all delivery time guarantees.
Address corrections are not simply shipping to an undeliverable address but encompass street number errors, ZIP code errors, missing suite numbers, and the most frustrating of all- address formatting errors. Did you not put the apartment number on the second receiver line? Did you forget to abbreviate “STREET” as “ST”? Or directional abbreviations; did you write out “North 14th St” instead of “N 14th St”? – if so, carrier systems will read these coordinates as part of the actual street name instead of as directions to a specific destination. For these, amongst others, you will likely ensue a carrier fee for fixing this address error. Some common errors that could help you streamline your process and avoid penalties will be outlined at the end of this article.
Things to Consider
If a mistake has been made in the address, it is considered incomplete. If the ship-to-address entered does not match the corresponding address in the carrier’s system, FedEx & UPS will kindly try to correct and complete the delivery on your behalf, while tacking a sizeable fee onto your invoice. Did it really cost them $15.90 because you entered zip code 11041 instead of 11040? How many times has the carrier delivered to that same address in the past, likely many? Controlling address correction fees is typically a minor internal fix.
For packages that incur an address correction charge, both carriers void the money-back guarantee; this means the carrier can deliver the package late and you cannot file for a late delivery refund…
|FedEx Ground Address Correction Fee||UPS Ground Address Correction Fee|
|$15.00 per package and up to $45.00 per shipment – |
meaning they will charge you for the first 3 packages in your shipment incorrectly addressed
|$15.90 fee per package, and up to $111.30 per shipment |
– meaning they will charge you for the first 7 packages in your shipment incorrectly addressed
Let’s do the math:
For example: If you ship 1,000 packages a day and 1% of these shipments need an address correction – then 10 packages a day would be subject to this approximately $15.00 fee.
10 incorrectly addressed packages per day x 252 shipping days per year = $37,800
Thus, it will cost you $37,800 annually in this accessorial fee alone.
Most shippers rarely have the time to inspect and manage the address corrections on their invoices. These fees are complicated and deserve attention all their own. Awareness is the first step in preparation for these avoidable charges. The second step is to solicit our unique services. Our services include running specific reports to spot “repeat offenders” or, simply to pinpoint and filter through to find the incorrectly formatted addresses your business has shipped to during the day or multiple day periods throughout the year – so you can fix these problems internally. In addition, we can incorporate CASS certified software into your system that can fix or suggest address corrections in real time or batch. We even have developed the capability to connect this software directly to your online shopping cart to validate all addresses as your orders are being generated from your website.
Why This Should Matter to You RIGHT Now
This accessorial fee not only causes you to lose the delivery objective, but also allows carriers to deliver your package late while charging you a fee. Plus, it also causes other ancillary problems for your business. Think of the returned mail or packages being delivered late to customers. As outlined previously, if 1% of your packages are incorrectly addressed, not only is it costing your company a large amount in fees, but think in terms of your clientele – what 1% of your customers are your willing to lose? If you are incurring this accessorial fee from your carrier, the first time – shame on them. The second (or third) time – shame on you.
Contact LJM Group today for more information on how our services can help your company ship smarter. It’s your money—we’ll help you get it back.
For any questions or information, feel free to call or e-mail: 631-844-9500 or info@myLJM.com