Are New Audit Fees Costing you $1 per package?

June 4th, 2018 UPS introduced a new fee that many companies are not even aware of, and it can be costing you a $1 per package. The Fee is called the Shipping Charge Correction Fee. UPS has obviously uncovered a new revenue stream, and one they do not tie to the package level. So how here is a breakdown on the charge and how to avoid it.

What is the Shipping Charge Correction Audit Fee Assessed?

In UPS' own words:

Effective June 4, 2018, the fee for Over Maximum Limits and the Oversize Pallet Handling Surcharge will increase by $150 and a new Shipping Charge Correction Audit Fee will be added. The Audit Fee will be assessed if the average shipping charge correction in an invoice week is more than $5.00. The Audit Fee will be the greater of $1.00 per package subject to a shipping charge correction or 6% of the total amount of shipping charge corrections during the applicable invoicing period...

Source: https://www.ups.com/pr/en/shipping/rates-update.page?

This means any time that a few package is assessed a certain correction, for dimensional weight, handling or other, that there will be an additional charge of $1.00 or 6% of the total charge, whichever is greater. This is above and beyond the actual corrections themselves. 

This is charge appears in the middle sectition of your printed UPS bill hidden among the correction fees, not associated to any particular package.

When and how is the Shipping Charge Correction Audit Fee Assessed?

Once Again, in UPS' own words:

Shipping Charge Correction Audit Fee

– An audit fee will be assessed when the average shipping charge correction during an invoice week is greater than $2.00 per package subject to a shipping charge correction.

– The fee will be calculated per account number, based on shipping charge corrections billed to the account number during the applicable invoice period.

– Shipping Charge Correction Audit Fee does not apply to import shipments.

 

The Fee Assessed is Greater of:

– $1.00 per package subject to a shipping charge correction during the applicable invoice period; or

– 6% of the total amount of shipping charge corrections during the applicable invoice period

Source: https://www.ups.com/assets/resources/media/en_US/daily_rates.pdf#page=113 

 

 

What is UPS Auditing?

 

When a shipper does not provide accurate data realative to a package, it is subject to corrections. There are many reasons you want to enter correct data, and shipping charge corrections are already a big margin killer that companies are just not aware of. But once again, in UPS's own words, here is what they say about corrections:

 

Shippers are responsible for providing accurate and complete shipment information on the shipping document or in the automated processing system used, including service selected, number, weight and dimensions of packages. UPS reserves the right to audit any package and/or invoice to verify service selection, package dimensions or weight and applicability of any charges. As part of that audit, UPS may weigh and measure any package tendered to UPS using any method UPS deems appropriate including, but not limited to, multidimensional measuring devices. If any aspect of the shipment information provided by the shipper is incomplete or incorrect as determined by UPS in its sole and unlimited discretion, UPS may in its sole and unlimited discretion adjust charges at any time. [Emphasis added]

 

Source:  https://www.ups.com/assets/resources/media/en_US/daily_rates.pdf#page=113

"Uh-oh!"

There is good reason to be concerned, we see charges ranging from a few dollars to thousands of dollars. If your packages are being picked up by the truck load, you could easily be paying several extra thousands of dollars every day!

What to do?

How do you combat the Audit Fee? Here are some steps you should take

  • Understand the impact - Expose the costs, with a tool like Parcel BI it is easy
  • Reduce the corrections - You want to do this anyway, but make sure you are inputting dimensions, weight, package descriptions, etc correctly. 
  • Educate your people - explain the impact that corrections are having and the importance of doing things right.
  • Negotiate - You can negotiate any charge at any time, consider that the next time you see your UPS represntative
  • Complain - Competition will either follow suit or use it as an advantage, so let your carriers know anytime you feel you are fleeced instead of valued

In today's world where free shipping is expected, you need to know the impact. You need the data. You need Parcel BI.

To Learn More, Contact Us today or see the impact yourself... 

SCHEDULE A DEMO

UPS is a registered trademark of United Parcel Service of America, Inc.

 

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