Revisiting a Surplus of Surcharges
The following topic may be familiar to some. The "Surplus of Surcharges" has been our most popular Newsletter to date. We've had a lot of new subscribers since it was first published and wanted to share it again. The answers here give an important insight into understanding and managing your shipping costs.
“Sticker shock” is a common effect when it comes to shipping costs for live animals. Why is it so expensive?
Express shipping (shipping by air) is expensive by its very nature. Planes are expensive to buy, maintain and fly. The cost of flying has increased dramatically over the years—not just in the basic price of a plane ticket, but with all the extra fees added on for things that used to be free. When you ship an animal via Priority Overnight shipping, think of it like buying a plane ticket for your critter.
Just like the airlines, FedEx tacks on a variety of surcharges that will impact the ultimate cost of your label.
The four most impactful and common surcharges are:
- Fuel Surcharge
- Residential Delivery Surcharge
- Delivery Area Surcharge (DAS)
- Delivery Area Surcharge Extended (DAS-E)
Fuel Surcharge
Both of the primary commercial carriers (FedEx and UPS) add a fuel surcharge on top of the base retail rate of every shipment. This number fluctuates monthly, based on variables such as the current cost of crude oil, the cost of refinement, and the cost of delivery. Although the carriers make an effort to minimize dramatic changes in this surcharge by averaging out costs over time, swings in the price of oil or natural disasters that impact refineries, pipelines, or distribution will have an effect on shipping costs.
The fuel surcharge for Express deliveries will be different than the charge for Ground deliveries, as one is calculated based on jet fuel and the other is calculated based on the cost of diesel fuel.
Residential Delivery Surcharge
Any package sent to a residential address will incur a surcharge of $4.15 for Express shipments. A residence is defined as a home—including a business operating out of a home—that does not have an entrance open to the public.
If you run a Quick Quote to check the price of a shipment ahead of time, this surcharge will not be included in the estimate. The estimate is determined based on zip codes, so there’s no way for the calculator to know whether or not the intended address is residential or business. This is one of the most common reasons why your estimated delivery cost might not match your actual costs when booking the label.
Delivery Area Surcharge (DAS)
This surcharge is applied to all zip codes that fall within a specific distance from their local FedEx hubs. The DAS applies to both businesses and residences within these zones. Also, the DAS does not override the Residential charge, but is added to it. Packages sent to a home address in a rural area will very likely incur two separate charges.
Delivery Area Surcharge Extended (DAS-E)
The DAS-E is the same thing as the DAS, but even more remote from the FedEx hubs. Shipments that have to be carried this far will incur a higher surcharge than the DAS. And again, this is in addition to the Residential charge. There are over 20,000 DAS and DAS-E zip codes! It’s quite possible that as many as 20% of your shipments are being hit with these fees.
How can I avoid these charges?
The best way to avoid most of these charges is to have your shipments held for pick-up at your recipient’s local FedEx hub (FedEx Ship Center...NOT a FedEx Office or other independently owned retail outlet). This means they will have to drive out there to receive their shipment and not everyone is willing or able to do so. Everyone values their time, effort, and money differently, so it should be a mutual decision between seller and buyer whether or not the package is held at the hub.
You can also see if your customer has a business address that you can ship to. That will at least avoid the Residential Delivery charge.
Lastly, bear in mind that we here at ShipYourReptiles want your business to be successful! We want you to be able to reach the widest customer base possible. Whether you have a large business or a small hobby, we will work with you to get you the shipping rates you need!
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