For the benefit of our clients and our staff, we’ll be posting a monthly “Freight Freak” blog. This month we’ll do our best to explain current freight charges, surcharges, additional handling charges, discounts, and some of the new hybrid shippers. Since shipping is such a big portion of what we do here at AMS, we make every effort to choose the right carrier.
Small parcel carriers, such as UPS and FedEx, have several hundred surcharges and accessorial fees that can be applied to any domestic or international shipment. Some of these are hard-coded and others may be applied at the discretion of the carrier. We are aware of some of the most common, such as Fuel and Residential Delivery, or even Dimensional Weight, which we have discussed in another blog. Others that come into play often are Additional Handling, such as Oversize.
An Additional Handling surcharge applies to any FedEx Ground package that measures greater than 48 inches, but equal to or less than 108 inches along its longest side. Prior to June 1, 2016, a surcharge applied to any FedEx Ground package that measured greater than 60 inches but equal to or less than 108 inches along its longest side. All other Additional Handling surcharges such as size, weight and packaging parameters, remain unchanged. The surcharge remains at $10.50 per package.
Because of the increase of eCommerce during the past ten years, major small package companies have lost margin due to residential shipping. It is much more expensive for companies such as UPS and FedEx to deliver to homes, and as a result, many new hybrid shippers, such as Smart Post, Mail Innovations, Smart Mail, Blue Package, RRD and OSM have emerged with an increase of this market share. The freight charges of these companies avoid the $3.65/package surcharge and several of the other surcharges that UPS or FedEx Ground will add on when delivering to a residential zip code.
Due to our heavy volume of shipping, AMS has been able to negotiate discounts on several of the most common surcharges. These discounts provide a good cost savings and an advantage to our clients. It’s very important to understand that the majority of client orders fulfilled are for residential delivery. Those orders should always be set with the correct ship code… one that takes advantage of these discounts.
For example, FedEx Home Delivery does discount the residential surcharge, however FedEx Ground does not. FedEx ground is a cheaper service only when shipping to a commercial zip code. If a person uses this particular ground service for a residential delivery it becomes much more expensive. At AMS we always advise our clients to ship with one of our services that do not add an additional residential surcharge such as FedEx Home Delivery, Smart Post or Blue Package.
For more information please contact John Bevacqua by phone or email at the following: Office 661-775-0611 or [email protected].
About the Freight Freak:
John Bevacqua is the VP of Logistics at AMS Fulfillment. He has more than 20 years of experience, giving him hands-on expertise in streamlining supply chain processes and developing and improving customer-centered approaches to global logistics. John’s area of excellence is in creating distribution and fulfillment operations that function as a capable interface between suppliers, retailers, and wholesale distributors. His experience includes developing and leading FedEx/ Kinko’s Distribution Services into the FedEx post acquisition, USA Wireless Technologies, and a top Logistics Management company. He has also worked with third party fulfillment companies, preparing him for his current position with AMS Fulfillment.
John earned his Bachelor of Science in Business Management and Economics from State University of NY. He has earned a Certificate in Purchasing and Material Management (CPM) from UCLA in cooperation with the National Association of Purchasing Management (NAPM), a Certificate in Innovative Technologies for Distribution Systems from Pennsylvania State University, and a Certificate in Building, Design, Layout and Logistical Planning from MIT.