Shipmint 101: How FedEx and UPS Assess Delivery Area Surcharges
  • March 9, 2020
  • Staff Report

Shipmint 101: How FedEx and UPS Assess Delivery Area Surcharges

As e-commerce continues to shift deliveries toward rural and residential destinations, the relevance of Delivery Area Surcharge fees is increasing.

Each carrier assesses a Delivery Area Surcharge, or DAS, fee for packages with destinations to certain zip codes. Standard DAS fees are assessed to a swath of zip codes that either carrier considers to be rural. Extended DAS fees – which are slightly higher – are applied to packages headed to destinations that branch farthest into the carriers’ delivery networks.

Service types also play a role in the amount of the fee. Packages shipped via UPS or FedEx Ground to Commercial destinations, for example, currently carry a fee of $2.95, the cheapest of the DAS fees. Residential deliveries shipped to Extended Area zip codes via UPS Air or FedEx Express, on the other hand, are hit with a $5.40 charge, the highest among the contiguous U.S.

Each carrier publishes an annual list of Delivery Area Surcharge zip codes each year.


2020 FedEx and UPS Published Delivery Area Surcharge Rates

 

FedEx

Charge Type UPS

$2.95

Commercial – Ground

$2.95

$3.10

Commercial – Air

$3.10

$4.40

Residential – Ground

$4.00

$4.00

Residential – Home Delivery*

N/A

$4.40

Residential – Air

$4.40

$3.45

Commercial Extended – Ground

$3.45

$3.60

Commercial Extended – Air

$3.60

$5.40

Residential Extended – Ground

$5.40

$5.40 Residential Extended – Home Delivery*

N/A

*FedEx Home Delivery is a FedEx service only.


Download: 2020 FedEx Delivery Area Surcharge Zip Codes

Download: 2020 UPS Area Surcharge Zip Code Listing


FedEx shippers should pay particular attention to DAS destinations. Shipments going to commercial destinations should be serviced through the FedEx Ground network. FedEx Home Delivery is designed specifically to service residential shipments. This is a key difference between FedEx and UPS, which utilizes one ground network to service shipments to commercial and residential destinations.

A common mistake FedEx shippers make is to inject residential shipments into the wrong network (i.e. FedEx Ground). When this happens, the DAS surcharge is $4.40, $0.40 higher than the $4 DAS charge for residential packages shipped via FedEx Home Delivery. (UPS charges $4 for all residential DAS.)

What can compound the problem for FedEx shippers is that contracts often discount Residential Home Delivery DAS and not Residential FedEx Ground DAS. That often results in a much higher costs to ship to residential destinations; sometimes as much as much as $2.80 per shipment.

This problem is particularly prevalent with organizations that use third-party fulfillment companies. Often, 3PLs charge percentage markups on shipping costs and therefore benefit from higher base prices.

Regardless of how you source, fulfill and ship your packages, DAS charges are something every shipper should get familiar with.


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