How much is your business spending on shipping charge corrections? If you’re not sure, the answer is probably too much. Here’s how to identify and avoid this expense.
Whether you’re operating a fledgling e-commerce business or an established brand with a devoted customer base, your profit margins can still be razor-thin. That’s why shipping charges are such a crucial — and often frustrating — aspect of your budget. Shipping charge corrections are unexpected expenses that can be especially frustrating, and they can quickly add up to completely derail your profit and prevent your business dreams from coming true.
Shipping charge corrections may account for almost a third of your shipping expenses. So, when taking stock of your shipping costs and looking for places you may be overspending, this is the first place to look.
Shipping charge corrections have been on the rise for years and are likely to continue growing. It is more important than ever to understand what they are and be on the lookout for places you may be incorrectly charged these often shockingly high fees.
In this article, we’ll go over some common shipping charges, discuss why they’re charged, address recent changes UPS and FedEx have made, and talk about what you can do to save your business money.
Understanding shipping charge corrections
Before we get into what shipping charge corrections actually are, we have to warn you: There are a lot of them. This is why they can be easy to miss and hard to understand. After all, unless you’re working for UPS or FedEx yourself, their jargon can be confusing.
Simply put, a shipping charge correction is issued when the business gets the shipping details wrong. Many people think this only refers to address corrections, but there are many other incorrect details that can result in shipping charges.
One common shipping charge correction is dimensional weight. This refers to the package density, which is determined by measuring a package, dividing it by the rate, and rounding up. Errors related to dimensional weight include simple math mistakes and failing to round up (always round up!).
Other charges include additional handling fees due to:
- Unusual size
- Inadequate packaging
- Unique packaging such as tube-shaped containers, containers made of wood or canvas, and containers with handles that may get caught on obstacles
You should also look out for fees related to:
- Incorrect weight
- Overweight packages
- Shipments that cannot be stacked
- Fragile or potentially dangerous items
- Surcharges for very remote addresses that are not easy to access
- Multiple delivery attempts
- Shipments classified as residential instead of commercial
- Peak season surcharges
- And, of course, those address corrections we mentioned earlier
See? We told you it was a long list — and that’s not even an exhaustive list.
How UPS and FedEx handle shipping charge corrections
So why do UPS and FedEx charge these fees? Is it just to make money? Yes, but it is also to discourage businesses from shipping packages via residential delivery that should be shipped via freight. Both UPS and FedEx have implemented higher charges to attempt to discourage businesses from making these and other errors. That being said, carriers make mistakes too, and it’s not unusual to get accidentally charged or overcharged (more on that in a minute).
In June 2018, UPS announced new shipping charge correction fees that are implemented when the shipping charge correction is more than $5 per package. Also in 2018, FedEx updated its peak handling surcharge ($3.20 per package) as well as its shipping charge correction fees outside of the holiday season, which includes a surcharge of $20 per package for packages over 70 pounds (an increase from $12) and a surcharge of $675 for ground-unauthorized package charges (up from $300).
The message these carriers sent remains clear: If you make a shipping mistake, you will pay for it.
What to do
In order to avoid these costly fees, your first order of business should be to get familiar with shipping charge corrections. These are available on both the UPS and FedEx websites. Once you’ve given these a read and understand them, follow through by spending time ensuring you have the correct address and classification on your packages. Do not guess a shipment’s weight and always round up. Lastly, don’t ship via residential delivery when you should be utilizing freight.
Working with an expert in shipping audits prevents mischarges and will identify incorrect charges. 71lbs can help by auditing 65 service points and reviewing invoices to make sure that you’re not overcharged.
If you’re feeling puzzled by shipping charge corrections, contact 71lbs today.We are experts at helping save businesses money on shipping by taking the time to not only audit but explain shipping costs in language that actually makes sense.