By now most large shippers are either familiar with or utilizing one of the parcel services featuring final mile delivery by the USPS. UPS SurePost & UPS Mail Innovations, FedEx SmartPost and DHL Global Mail all offer lower cost ground shipping alternatives, albeit often with longer delivery times and less shipment visibility. However FedEx has quietly released the news that effective July 15th, a twenty-five cent ($0.25) Delivery Area Surcharge will be added to all of its SmartPost shipments. FedEx has officially announced this on its website. 

It will affect the same 23,529 Domestic DAS and DAS Extended Zips as with standard commercial and residential deliveries..

The surcharge applies to FedEx SmartPost Parcel Select (one pound and greater), FedEx SmartPost Parcel Select Lightweight (one ounce to sixteen ounces), FedEx SmartPost Bound Printed Matter, FedEx SmartPost Media, and FedEx SmartPost Returns shipments.

There have not been any official explanations yet but we would expect FedEx to claim that the delivery to DDU’s in these zip codes costs them more to service even though they are not actually entering many of the zip codes for which they are charging. In fact after pickup and initial sortation, FedEx outsources much of the movement of SmartPost shipments to other transportation providers. Thus the justification for a Delivery Area Surcharge for these services should face stiff push back.from shippers. 

It’s basically the next in a never ending list of surcharges that continually raise shipping costs for even the most savvy shippers. FedEx now has over 370 unique surcharge descriptions and about 320 unique categories, while UPS has over 280 unique surcharge descriptions and about 190 unique categories. 
Shippers should expect UPS to follow FedEx’s lead and implement the surcharge to its SurePost product and potentially its UPS Mail Innovations services. While UPS has not officially announced the fee, they have added the functionality to one of its most recent UPS Worldship updates. Worldship is UPS’ most heavily utilized manifesting software.

There are no planned official changes from DHL Global Mail as of yet and hopefully, they will not follow suit and instead continue to provide shippers with a comparable, lower cost alternative.

If you haven’t already, shippers should get ahead of the curve and start addressing this new charge prior to July implementation. 

John Haber is an expert in shipping, freight, and transportation spend management. Contact him