The announcement came in a little under the radar for many ecommerce shippers, so we thought we’d remind UPS shippers of the Audit Fee imposed by UPS earlier this summer.
From the UPS website:
Here is our analysis of what this means.
It’s another example of the differences in how FedEx and UPS manage their business — specifically in how they bill. UPS bills based on the cost at the time a shipment is manifested. FedEx, at the time of delivery.
So, when UPS ecommerce shippers fail to include surcharges (intentionally or not) like those spelled out above, the invoice sent to the customer does not include them. This means a second, revised invoice needs to be issued to correct the invoiced amount. This is what these fees are intended to cover. Because FedEx does not invoice until the delivery is made, any additional costs are included and there is no need for the invoice to be adjusted.
The intent of the announcement is primarily to punish shippers who intentionally don’t manifest the additional fees. The net cost of the fees is not necessarily significant to every company, but may be for shippers. Ecommerce shippers already struggle with being able to pass on their actual shipping costs. For many, the cost of shipping is a loss leader. Some may also provide a shipping cost at checkout and bill the customer based on those costs. Because these fees are imposed after the fact, it is difficult or impossible for the retailer to recover the additional expense from customers.
View the full UPS announcement here: https://www.ups.com/us/en/shipping/rates-update.page
If you would like to know how these fees may impact your shipping costs, contact us for a free analysis. Visit our website – here.