Have you noticed extra charges on your UPS/FedEx bills for some shipments labeled “Delivery Area Surcharge/Extended Delivery Area Surcharge”?
The DAS surcharges apply to select, rural and remote zip codes throughout the United States. Carriers charge these fees to offset their higher cost to deliver packages to those destinations. The surcharge varies in cost by if the package is traveling to a residential or commercial address, and how far it is from a UPS/FedEx hub.
DAS surcharges are added to the base transportation costs of your shipments when traveling to rural zip codes, raising your costs by $2.95 - $5.40 within the contiguous 48 states. The charges are more expensive when traveling to residential addresses, meaning most e-commerce brands are being hit on the highest range of these costs. For a 1 pound package traveling to a residential address, this surcharge could raise your cost by 65%! This unexpected cost can easily take a product that you were shipping at a margin to one that is shipping at a loss.
There are two ways to avoid or reduce these charges:
1. Use a flat-rate shipping product
2. Negotiate a discount with UPS/FedEx
Because flat-rate products typically require using the carriers specific packaging, this option does not work for many shippers.
We are regularly helping clients negotiate 25-50% off of the DAS surcharges, and have helped some eliminate them entirely. Contact us for a free consultation on your shipping agreement today to see where we can help reduce your costs!