2019 Guide to Office Shipping - January 2019 - Shipping - Pitney Bowes

 
2019 Guide to Office Shipping - January 2019 - Shipping - Pitney Bowes
Shipping

2019 Guide to
Office Shipping
January 2019
2019 Guide to Office Shipping - January 2019 - Shipping - Pitney Bowes
Shipping remains a big cost item for
many organizations.
Although shipping a few items may seem simple, the
process gets more complicated as volume increases.       A trusted leader in business shipping for over 35 years, Pitney Bowes
From address correction fees and DIM weight rating to    helps companies of all sizes process millions of parcels with speed
                                                         and reliability. We help customers optimize their shipping operations,
delivery area and fuel surcharges, shipping packages
                                                         delivering reliable solutions that can make your business run more
can be confusing, costly and time-consuming.             productively and profitably. As the inventors of the first commercially
                                                         available postage meter, we have 90 plus years of experience
We want to help you navigate through the complexities.   delivering innovations that help clients achieve success.
That’s why we created this Guide to Office Shipping.
Inside, you’ll find detailed explanations of the most
common and often unexpected shipping costs
organizations encounter. We also compiled a glossary
of common shipping terms for easy reference.
Ultimately, this guide is designed to help clarify the
shipping process, so you have more time to focus on
the things that matter most.

                                                                                                                                   2
2019 Guide to Office Shipping - January 2019 - Shipping - Pitney Bowes
Table of contents

General shipping rate increases          4

Additional shipping fee increases        5

Address correction fee                   6

Ground residential delivery surcharge    7

Delivery area surcharges                 8

Dimensional (DIM) weight rating          9

Fuel surcharges                         11

Peak shipping charges                   12

New USPS® pricing for parcels           13

2018 Intra-Year Shipping Rate Fees      14

Surcharges and fees in practice         15

Sample carrier invoice                  16

2019 carrier accessorial fees           17

Summary                                 18

Glossary of shipping terms              19
                                             3
2019 Guide to Office Shipping - January 2019 - Shipping - Pitney Bowes
General shipping rate increases
Shipping costs have risen steadily over the past decade and 2018 was
no exception. Rates continue to rise in 2019 with FedEx announcing
a rate increase of 4.9 percent effective January 7, 2019 and the USPS
announcing a rate increase of 5.9 percent effective January 27, 2019.
                                                                             2019 rate increases
UPS was the first to go into effect, with an increase of 4.9 percent, that   As this table illustrates, some carrier rates
went into effect December 26, 2018.                                          will climb nearly 6% in 2019. At this rate,
Despite these rate increases, carrier profit margins in the US have          by 2025 general shipping rates may be as
stagnated or declined in recent years. The industry faces intense            much as 35% higher.
competitive pressure. And the eCommerce boom has increased shipping
volume dramatically. To keep up, carriers needed to invest billions of
dollars in new infrastructure to handle the volume. New revenues,                              2019
through fees and surcharges, are often the only way to make up some of                         annual increase
these costs.
                                                                               UPS®                 +4.9 %
                                                                                               Effective December 26, 2018

This guide shows you when and where to expect
shipping rate increases, so you can plan accordingly.                         FedEx®                +4.9 %
                                                                                               Effective January 7, 2019

                                                                               USPS®                +5.9 %
                                                                                               Effective January 27, 2019

Source: reuters.com/article/us-usa-ecommerce-freeshipping-idUSKBN1432ZL

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2019 Guide to Office Shipping - January 2019 - Shipping - Pitney Bowes
Additional shipping fee increases
As rates are increasing, accessorial fees and other surcharges are also
being applied more regularly, pushing costs even higher.

Although baseline shipping rate increases can be a headache, the real challenge
for growing organizations is making sense of accessorial fees and surcharges.
Carriers aren’t always transparent about what these charges are and how they
apply. And carrier invoices display these fees in different places, so it’s easy to miss
them. What’s more, fees can be added to each package you ship, so your total
shipping costs can rise unexpectedly.

        Did you know?
        Domestic shipping rates and surcharges have
        increased more than 50% over the last decade.

                                                                                             In the next few pages, we explain the most
  Rates and surcharges combined increase 2009-2019
                                                                                             common accessorial fees and surcharges,
                         UPS®                         FedEx®                        USPS®*   describing what they are and how they work.
  Ground                                                                                     Most of these costs are beyond your control, but there are
  Base                                                                                       opportunities to minimize expense if you know which carriers
  Rate                  53%                           53%                           31%      charge which fees. Throughout this guide, we highlight simple tips
                                                                                             and strategies you can use to help offset some of the costs.
                                                                                             Let’s get started.
  Priority
  Express
  Rate                  59%                           53%                           31%
 Source: Historical & Current USPS, UPS, and FedEx Rate Analysis
 * Zones 1-4 up to 5 Lbs. USPS is the most competitive light weight carrier in Zones 1-4.

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Address correction fee
Imagine you prepare a package, create a label and then send it off for
two-day delivery. You precisely calculate the cost and know exactly how     2019 Address correction fees
to account for it. Suddenly, though, a few days later you’re hit with an    Ground with freight pricing
inexplicable charge. What’s going on? Well, if your destination address
doesn’t match the corresponding address in a carrier’s system, they will                                         2019 Fees
correct it and charge you a hefty address correction fee.
                                                                            UPS®
                                                                            Fee per package for
                                                                            Address Correction.
                                                                                                             $
                                                                                                              16.40
       Shipping tip:
       Manual shipment processing leaves room for human                     FedEx®
       error. Take advantage of office shipping technology                  Fee per package for
                                                                            Address Correction.
                                                                                                             $
                                                                                                              16.00
       to verify addresses and avoid fees. Whether you
       are a small office, a large enterprise, or somewhere                 USPS®
       in between, there are solutions available to fit your                No address correction fees             $
                                                                                                                    0
       organization’s needs.                                                are administered.

       Click for more shipping tips
                                                                            Ground shipment correction fees increase, 2009 -2019

An incomplete or incorrect address can mean anything from an invalid
house number to a missing ZIP Code™. Sometimes carriers will assess a fee
                                                                                             198%
if you misprint even one number. So, it pays to be precise.
                                                                                                          187%

UPS 2019 rate and surcharges effective December 26, 2018.
                                                                            Source: Historical
FedEx 2019 rate and surcharges effective January 7, 2019.
                                                                            & Current USPS,

                                                                                                                        0%
USPS 2019 rate and surcharges effective January 27, 2019.                   UPS, and FedEx
                                                                            Rate Analysis

                                                                                                 UPS      FedEx          USPS      6
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Ground residential delivery surcharge (RDS)
Another unexpected cost is the residential delivery surcharge. As the
name implies, this surcharge applies to packages shipped to a home or              Shipping tip:
private residence. Unfortunately, what counts as a “private residence”             Consider the option of USPS Priority Mail®, which
isn’t always straightforward. For example, imagine you ship a package to           offers one low transportation rate without additional
another business, but that business is operated out of a private residence.
                                                                                   residential delivery surcharges.
In such cases, you’ll likely incur a residential delivery surcharge.
                                                                                   Click for more shipping tips
Sometimes it can get even more confusing because different carriers
can designate the same property in different ways. One carrier might
designate a given delivery address as a residence while another
designates it as a business. Be sure to check in advance if you’re not sure.
There are solutions available that easily identify whether a property is
designated as residential or commercial.
Note that although you can negotiate these surcharges, small discounts
will not often alleviate the dramatic costs associated with the residential
delivery surcharge. Like most charges, it’s important to be aware that the
residential delivery surcharge is assessed to each package you ship.

Delivery area surcharge                  Source: Historical & Current USPS, UPS,
10-year increase, 2009 -2019             and FedEx Rate Analysis

85%                                      Residential delivery surcharge
                                         10-year increase, 2009 -2019
             78%
                                         64%
                                                        58%

                         0%                                            0%
  UPS®        FedEx®      USPS®             UPS          FedEx          USPS
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Delivery area surcharges (DAS)
Like the residential delivery surcharge, additional fees apply based                                   There are over 23,500 Domestic DAS and DAS-E ZIP
on the intended delivery area of a package. Please note: This
surcharge does not replace, but is in addition to the residential      23,500+                         Codes affected by these surcharges, more than half
                                                                                                       of all ZIP Codes in the United States. There are higher
delivery surcharge, as well as any address correction fees you
may incur.
                                                                       ZIP Codes                ™
                                                                                                       operating costs associated with providing service to
                                                                                                       less populated or inaccessible areas, so carriers feel
                                                                       in the US are subject
                                                                                                       compelled to assess these surcharges. Importantly, DAS
A delivery area surcharge is added to packages delivered to:           to annual delivery
                                                                       area surcharges                 and DAS-E fees are annually assessed to more accurately
• residential rural area                                                                               reflect the cost of providing service to these areas.
• residential super rural area
• commercial rural area
• commercial super rural area
                                                                              Did you know?
In some instances, the fees can be compounded if your package                 Delivery surcharges vary by carrier, so be certain to
destination is considered “very rural.” In such cases, carriers may
apply a delivery area surcharge extended, or DAS-E. This fee
                                                                              comparison shop before making your final carrier
pertains to destinations which are an “extended distance” from a              selection. Remember to diversify carriers to discover
UPS® or FedEx® hub. As before, this surcharge does not replace,               savings opportunities.
but compounds other surcharges that may be assessed.                           Click for more shipping tips
Notice that, depending on the destination, a single package could
potentially incur three separate surcharges. For example, recall
the first scenario: You think you’re shipping to a business, but
it turns out to be a residence. So, you’re hit with the residential     2019 Air delivery surcharges by national carriers
delivery surcharge. Then, imagine if the property happened to
be in an area designated as “rural.” In addition to the residential                                                              UPS®   FedEx®     USPS®
delivery surcharge, you could also incur a delivery area surcharge
as well as delivery area surcharge extended. It’s easy to see how       Residential delivery surcharge                       $
                                                                                                                              3.95      $
                                                                                                                                         3.80       $
                                                                                                                                                     0
quickly these fees can pile up.
.
                                                                        Delivery area surcharge residential                  $
                                                                                                                              3.80      $
                                                                                                                                         3.65       $
                                                                                                                                                     0
                                                                        Delivery area surcharge extended residential
                                                                                                                             $
                                                                                                                              4.85      $
                                                                                                                                         4.65       $
                                                                                                                                                     0
                                                                        UPS 2019 rate and surcharges effective December 26, 2018.
                                                                        FedEx 2019 rate and surcharges effective January 7, 2019.
                                                                        USPS 2019 rate and surcharges effective January 27, 2019.
    TOC                                                                                                                                                          8
Dimensional (DIM) weight rating
Historically, shipping costs were calculated according to the gross       Below are the 2019 domestic and international DIM weight carrier factors. Carrier rates
weight of a package. The eCommerce boom, however, prompted                are subject to change and typically are re-evaluated by carriers annually. For 2019,
most national carriers to reconsider this approach. Lighter weight,       there will be no DIM for USPS zones 1 to 4 and the balloon rate that is applied to zones
lower density packages are comparatively less profitable for carriers     1 to 4 will be eliminated. The DIM is 194 for zones 5 to 9 and the DIM for international
because they take up so much space relative to the price charged          is 166 for USPS. If you primarily ship smaller boxes through UPS, this change means a
per package (based on weight alone). Looking for ways to adjust this      significant increase on your monthly invoice.
model, carriers started using dimensional (DIM) weight rates. DIM
weight rates allow carriers to establish a minimum charge for the
                                                                            2019 dimensional (DIM) weight factor by national carriers
cubic space a package occupies.
DIM weight is calculated by multiplying the length by width by              Carrier      Domestic DIM factor                   International DIM factor
height of each package (in inches) divided by carrier factor for
shipments. Sometimes, a customized dimensional weight factor can
be negotiated (in which case that factor is used). Please note: Carrier                  No DIM for Zones 1-4                  Divisor of 166 for all
                                                                            USPS®
factors may vary for domestic and international shipments.                               Divisor of 194 for Zones 5-9          International shipments

                                                                                                                               Divisor of 139 for International
                               Dimensional weight = L x W x H               FedEx®       Divisor of 139 for Zones 1-8
                                                                                                                               and Puerto Rico shipments
                        H                             carrier factor

                                                                                                                               Divisor of 139 for all US Export
                               L = Length in inches                         UPS®         Divisor of 139 for Zones 1-8
                       W                                                                                                       & Import shipments
                               W = Width in inches
        L                      H = Height in inches

                                                                                Did you know?
                                                                                Generally, carriers will charge
                                                                                based upon whichever weight is
                                                                                greater DIM or actual weight.

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Dimensional (DIM) weight rating
So, what do 2019 carrier factors look like in practice? Let’s say you’re
shipping a package from your office in Cincinnati to your office in               Shipping tip:
Cleveland. Below are the DIM weights you would encounter across                   There are ways to reduce the DIM weighting and keep
national carriers for a package with these assumptions:
                                                                                  shipping costs down. First, it pays to use the smallest
                                                                                  packaging possible. Second, unnecessary fillers should
Sample DIM weights by carrier in 2019
                                                                                  be avoided.
Zone 5: Cincinnati, OH to Cleveland, OH
                                                                                  Click for more shipping tips
Gross weight: 2 pounds
Length:“ 10“ Width: 10“ Height: 10“
                                                                           Multi-depth shipping boxes are
       Carrier            Weight calculation                               designed to be cut to size for your
                                                                           needs. Unnecessary fillers such as
                          10 x 10 x 10                                     foam peanuts or sealed airbags can
      USPS®                                  = 5.15 Lbs.*                  increase costs. Not only do such
                       carrier factor: 194                                 materials cost money on their own,
                                                                           but they require larger boxes when
                                                                           smaller boxes may suffice.
                          10 x 10 x 10
      FedEx®                                 = 7.19 Lbs.
                       carrier factor: 139
                                                                           For shipping supplies visit Pitneybowes.us/shop

                          10 x 10 x 10       = 7.19 Lbs.
      UPS®
                       carrier factor: 139

FedEx and UPS DIM remain unchanged, while USPS
is 194 domestic for zones 5 to 9, 166 for international.

*As of June 23, 2019

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Fuel surcharges
Fuel surcharges are designed to help carriers offset sudden fuel price
increases. Most major carriers now impose fuel surcharges on top
of the basic shipping rate. In general, these charges are unavoidable,
subject to change without notice and can significantly impact your
total shipping costs.
Shippers recently experienced significant changes in the way fuel
surcharges are assessed, leading to higher costs overall. FedEx® and UPS®
now index fuel surcharges to weekly fluctuations in diesel and jet fuel
prices, rather than monthly adjustments.
In April 2018, UPS split the fuel surcharges for Domestic Air and
International Air Export. Previously, export used to have the same fuel
surcharge as domestic air. This shift means export fuel surcharges will be
significantly higher. It can equate up to an extra one to two percent on
the cost of your export shipment.
In 2019, fuel surcharges will now apply to more than ever before. UPS
has added Additional Handling, Over Maximum Limits, Signature and
Adult Signature Required. How UPS calculates the Fuel surcharges are
scheduled to increase and details will not be available until early 2019.
Bottom line, shippers will experience greater fluctuation in fuel costs for
international packages when shipping with UPS. Given changing dynamics
in general fuel prices, assume that fuel surcharges are here to stay.

       Shipping tip:
       Don’t forget to consider the United States Post
       Office. USPS® package services is the exception
       to the rule, as the USPS does not pass on fuel
       surcharge fees for any of their services.
       Click for more shipping tips

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Peak shipping charges
As in past years, carriers announced new peak shipping charges that
impacted the 2018 holiday season. The surcharge increases below took                 Shipping tip:
effect during the shipping period of 11/18 – 12/24 for applicable UPS®               Consider using multi-carrier shipping software to compare
and FedEx® services. USPS® did not impose peak shipping charges.                     prices and delivery options during peak periods. This software
These peak shipping charges were designed to help offset expenses                    is designed to aggregate information from a variety of carriers
incurred for additional air and truck cargo capacity, among other costs,
                                                                                     in one place. Simply enter your package information and
during significant volume surges (i.e. the holiday season). Additional
peak surcharges also applied to residential packages or heavy packages.              delivery address, and the software will help you select the right
Shipments which are larger, heavier, or have unconventional shapes or                choice based on your priorities. For example, you might save
sizes create even greater operational complexity during high-demand                  by selecting ground versus air or priority versus standard.
periods. If history has shown us anything, it’s safe to assume peak
                                                                                     Click for more shipping tips
shipping charges are here to stay.

  UPS holiday surcharge effective dates: 11/18 – 12/22                     FedEx holiday surcharge effective dates: 11/19 – 12/24        UPS applied an
                                                                                                                                         additional per
                                                       2018 holiday service surcharges                                                   package surcharge
                                                                                                                                         from 12/16 – 12/22
                           Large package                 Over maximum/                              Additional handling                  to all packages:
                                                          unauthorized
                         length over 96” or a                                           length over 48”                                  Next Day Early AM   $3.14
                        combined length and                over150 lbs. or                longest side,                                  Next Day            $0.84
                                                                                                                        over 70 lbs.
                           girth over 130”                length over 108”                                                               2nd Day             $0.84
                                                                                        30” second side
                                                                                                                                         3rd Day             $0.99
                          UPS          FedEx             UPS          FedEx             UPS           FedEx          UPS        FedEx    Ground              $0.28

Holiday
                         $26.20       $27.50            $165          $150             $3.15          $3.20         $3.15        $3.20
surcharge
                                                                                                                                         FedEx did not
Total shipping          $116.20      $107.50            $815          $825            $15.15         $15.20         $22.15      $23.20   impose per package
charge                                                                                                                                   residential delivery
                                                                                                                                         charges during the
Percent increase                                                                                                                         peak shipping season.
                          24%          10%              104%          211%             8.2%           8.5%          58%          66%
from 2017

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New USPS® pricing for parcels for 2019
In Fall 2017, the U.S. Postal Service reclassified
First-Class Mail® Parcels (FCM Parcels) as retail                   First-Class 2019 commercial parcel and retail parcel rates
prices for First-Class™ Package Services (FCPS)
Commercial. FCPS allows you to ship light                               Zones 1 & 2                                                Zones 8 & 9
packages weighing under 16 oz. Prices within
the new retail category are available for items       Weight not     Commercial   Retail   Savings         Weight not         Commercial          Retail         Savings
                                                      over (Oz.)     rate (CR)*   rate**   with CR         over (Oz.)         rate (CR)*          rate**         with CR
weighing not over 13 oz. and will range between
13 percent and 120 percent higher than                    1            $2.66       $3.66    37%                1                 $3.09             $4.06          31%
commercial prices.                                        2            $2.66       $3.66    37%                2                 $3.09             $4.06          31%
Previous to 2019, USPS First Class Parcels were           3            $2.66       $3.66    37%                3                 $3.09             $4.06          31%
rated based on weight only. In 2019, both weight          4            $2.66       $3.66    37%                4                 $3.09             $4.06          31%
and zone shipped to will determine the rate.              5            $3.18       $4.39    38%                5                 $3.63             $4.81          32%
Although this new classification will impact              6            $3.18       $4.39    38%                6                 $3.63             $4.81          32%
your monthly invoice, it reflects only a modest           7            $3.18       $4.39    38%                7                 $3.63             $4.81          32%
comparative increase. USPS shipping rates
                                                          8            $3.18       $4.39    38%                8                 $3.63             $4.81          32%
remain some of the most cost-effective methods
                                                          9            $3.82       $5.19    35%                9                 $4.33             $5.66          31%
available to get packages from point A to point B.
                                                          10           $3.82       $5.19    35%                10                $4.33             $5.66          31%
In fact, shippers can qualify                             11           $3.82       $5.19    35%                11                $4.33             $5.66          31%
for lower rates known as
                                                          12           $3.82       $5.19    35%                12                $4.33             $5.66          31%
Commercial Base Pricing
                                                          13           $4.94       $5.71    16%                13                $5.53             $6.27          13%
by using IMpb-compliant
labels. IMpb® labels are                                  14           $4.94       $7.35    49%                14                $5.53            $12.20         120%
also trackable from the                                   15           $4.94       $7.35    49%                15                $5.53            $12.20         120%
moment you ship up to and                                 15.999       $4.94       $7.35    49%                15.999            $5.53            $12.20         120%
including delivery, making
this the better option for                                                                      *An IMpb solution is required to qualify for Commercial Rates; up to 16 oz.
price-conscious shippers.                            The Commercial rate is                    **Retail rates require Label 400; maximum weight 13 oz.

                                                     38% less
                                                     than the Retail rate
                                                     (on average)
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2018 Intra-Year Shipping Rate Updates
On December 26, 2018, rates for UPS® Ground, UPS Air and
International services will increase an average of 4.9%. UPS SurePost,         Shipping tip:
economy ground service for delivery to residences, will increase 9%.           It pays to ensure you include accurate dimensions,
Fuel surcharges will apply to Additional Handling, Over Maximum                weight, and delivery address on each and every
Limits, Signature Required and Adult Signature Required. Additionally,
a processing fee of $2.00 per package will be charged when Package
                                                                               package you send.
Level Detail (PLD) is not provided to UPS prior to delivery.                  Click for more shipping tips
On October 22, 2018, UPS modified the Shipping Charge Correction
Audit fee from $5.00 to $2.00. The fee will now be applied whenever      Effective December 26, 2018 UPS also increased their Additional
the average shipping correction charge on an invoice week is more        Handling Service (AHS) charge as well as Large Package Surcharge (LPS).
than $2.00.                                                              AHS charges for US domestic packages weighing more than 70 pounds
The Audit Fee will continue to be the greater of $1.00 per package       will increase from $19.00 to $23.00 (a 21% increase). LPS fees for US
subject to a shipping charge correction or 6% of the total amount of     domestic residential deliveries will increase from $90.00 to $115.20
shipping charge correction.                                              (a 28% increase).
Some of the shipping correction charges to which this
fee will apply include:
• Incorrect or missing package dimensions resulting in
                                                                         The graph below puts into perspective how these
                                                                         increases compare to the first half of 2018.                28 %
                                                                                                                    21%
  additional surcharges with the updated dimensions
• Incorrect or missing package dimensions resulting in
  corrected dimensional weight billed
• Incorrect weight entered resulting in a reweigh or
  dimensional adjustment                                                 UPS rate increase for
Throughout 2018, UPS had far more mid-year changes than in the past,     Additional Handling Service (AHS)
which could be the start of a new trend.                                 and Large Package Surcharge (LPS)

                                                                                                                      AHS                LPS
                                                                                                                    US domestic       US domestic
                                                                                                                      70lbs+           residential
TOC                                                                                                                                                  14
Surcharges and fees in practice
As we mentioned before, many of these fees and surcharges can be
less than transparent. So, we thought it might be valuable to review a      2019 Shipment Example
real-world example. Let’s compare carrier charges for a 2lb. package        Ground shipping                     UPS        FedEx             USPS
being shipped to Zone 2.
This example shows how quickly various fees and surcharges can add          2 lb Zone 2                   $8.65         $8.52           $7.10
up. Notice that with UPS® and FedEx® you could be charged more than            		                                                       no DIM for
                                                                            DIM                           139           139
$9 just for delivery, area and fuel surcharges. Note that the DIM pricing                                                               zones 1-4
from UPS and FedEx adds another cost differential, with the 10 x 10 x       10 x 10 x 10 Box              $10.43        $10.43          $7.10
10 box costing $3.33 more than USPS®. Then, on top of that, you could       Residential delivery surcharge $3.95        $3.80           $0
be charged $16+ in 2019, simply for an inaccurate address. In this
                                                                            Delivery area surcharge       $3.80         $3.65           $0
instance, because of these fees and surcharges, UPS and FedEx could
end up costing 5 times more than USPS.                                      Ground fuel surcharges        $1.41 (7.75%) $1.34 (7.50%)   $0
                                                                            Address correction fee        $16.40        $16.00          $0

                                                                            Total cost                    $35.22        $35.92          $7.10

                                                                            As this example highlights, picking the right carrier
                                                                            can mean big savings.

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Sample carrier invoice
The fees and surcharges outlined in this
                                                                            Delivery Service Invoice
guide can quickly add up and many times                                     Invoice date        January 2, 2019
you may not be aware they are even                                          Invoice number      00048736262
hitting your account. They are often                                        Shipper number      2929383
                                                                                                                     In this example, these fees
buried pages into your monthly invoice                                      Page 19 of 55
                                                                                                                     and surcharges are buried
and frequently go unnoticed. Below is an
                                                                                                                     on page 19 of 55
example of how these fees and surcharges
                                            Service              Weight   Zone         ZIP Code           Charge
may appear on your monthly statement.
                                            Ground Residential    2 lb     2                98765            $8.87
                                            Residential Delivery Surcharge				                               $4.45
                                            Delivery Area Surcharge				                                      $4.40
                                                                                                                     Learn more about the
                                            DIM
                                            10 x 10 x 10 Box				                                             $9.45   dimensional (DIM) rating on
                                            Address Correction Fee				                                     $16.40    pages 9 and 10   >
                                            Total Cost				                                                 $43.57

                                            Service              Weight   Zone         ZIP Code           Charge
                                            Ground Residential    4 lb     1                45630          $10.88
                                            DIM
                                            10 x 14 x 14 Box				                                           $14.10
Learn more about the residential delivery
                                            Residential Delivery Surcharge				                              $4.45
surcharge (RDS) on page 7  >                Ground Fuel Surcharge				                                       $0.69
                                            Address Correction Fee				                                     $16.40

                                            Total Cost				                                                 $46.52

                                            Service              Weight   Zone         ZIP Code           Charge

Learn more about the delivery               Ground Residential    3lb      2                56743           $9.90
area surcharges (DAS) on page 8   >         Delivery Area Surcharge
                                            Ground Fuel Surcharge
                                                                                                            $4.40
                                                                                                            $1.89    Learn more about
                                            Address Correction Fee				                                     $16.40    address correction fees
                                            Total Cost				                                                 $32.59
                                                                                                                     on page 6  >
TOC                                                                                                                                                16
2019 carrier accessorial fees
Comparison shopping is always a smart
idea. Multi-carrier shipping software         Recap of 2019 carrier accessorial fees
allows you to view all carrier rates,
including your own negotiated rates,
                                                                                                       UPS®                 FedEx®                    USPS®
through one platform, providing the tools
to make better-informed carrier choices.     Residential delivery surcharge                        $
                                                                                                      3.95               $
                                                                                                                            3.80                        $
                                                                                                                                                          0
                                             Delivery area surcharge residential                   $
                                                                                                      3.80               $
                                                                                                                            3.65                        $
                                                                                                                                                          0
                                             Delivery area surcharge
                                             extended residential
                                                                                                   $
                                                                                                      4.85               $
                                                                                                                            4.65                        $
                                                                                                                                                          0
                                                                                            Approx.    7.75%          Approx. 7.5%
                                             Fuel surcharges
                                                                                             of shipping costs        of shipping costs
                                                                                                                                                        $
                                                                                                                                                          0
                                             Address correction fees                              $
                                                                                                   16.40                $
                                                                                                                          16.00                         $
                                                                                                                                                          0
                                             Dimensional rating for zones 1-4*                         yes                   yes                        no
                                             Package tracking detail                                   yes                   yes                        yes
                                             Weight by ounce up to 16 oz.**                            no                    no                         yes

                                             *USPS – No DIM surcharge up to a cubic foot, zones 1 to 4           Rate and surcharge information as of December 2018.
                                            **USPS First Class Parcel is a flat rate charged by ounce up 15.99
                                                                                                                 UPS 2019 rate and surcharges effective December 26, 2018.
                                                                                                                 FedEx 2019 rate and surcharges effective January 7, 2019.
                                                                                                                 USPS 2019 rate and surcharges effective January 27, 2019.

TOC                                                                                                                                                                          17
Summary
Shipping is complex.
It pays to be prepared.

Increasing carrier rates and fees can dramatically impact your
bottom line. And with shipping rates projected to rise 17-28         Shipping tip:
percent each year between 2019 and 2021, taking control of           Don’t limit your options. Although
these costs now is imperative for future success. You can help       you may have negotiated rates
manage some of these fees by selecting the correct carrier           with one carrier, there’s no
for the right shipment and using some of the tips we outlined        guarantee that you’ve got the
in this guide.                                                       lowest price for your shipment.
                                                                     Click for more shipping tips
Cost control is fundamental to the success of your business.
We know it can be stressful to watch shipping rates and
additional charges rise every year. We want to alleviate some
                                                                 We’re here to help you #ShipSmarter.
of that stress and we are committed to being your go-to
shipping partner. If you need additional help navigating the     Call 1 800 672 6937
complex world of shipping, or want to find out more about        or visit us online
how Pitney Bowes can help you manage shipping costs, give        pitneybowes.com/us/shipping
us a shout and a representative will be in touch right away.
Source: 2018 Pitney Bowes Parcel Index

TOC                                                                                                       18
Glossary of shipping terms
                                                                                                    Accessorial fee
Accessorial fee                     Exempt carrier                    Purchase order                A fee charged by a carrier for supplementary
Air bill                            Fixed beam scanner                Quiet zones                   services, such as additional handling, fuel charges,
Acknowledgment of Delivery (AOD)    For-hire carrier                  Reader                        inside delivery, COD, delivery confirmation and so
                                                                                                    on. Some accessorial fees discussed in this guide
AQ rate                             Freight bill                      Regional carrier
                                                                                                    include: residential delivery surcharge, delivery
Barcode/barcode symbol              Freight class                     Standard Carrier Alpha Code
                                                                                                    area surcharge and delivery area surcharge
Barcode label                       Freight rate                        (SCAC)                      extended.
Barcode reader                      Gross weight                      Scanner
Call tag                            Hand held reader/scanner          Serial number                 Air bill
                                                                                                    A document use by air freight carriers that contains
Carrier                             Hazardous materials               Shipment
                                                                                                    a receipt of goods and an agreement to transport
Charge terms                        Human readable                    Stock Keeping Unit (SKU)      them to a consignee. An air bill typically includes a
Claim                               Identification code               Stacked barcode               description of the shipment, consignee information
Collect on delivery (COD)           Invoice                           Standard pack/fixed content   and tracking number.
Commodity code                      Logistics                         Super-regional carrier
                                                                                                    Acknowledgment of Delivery (AOD)
Common carrier                      Machine readable                  Supplier
                                                                                                    An accessorial offered by carriers that requires a
Consignee                           Manifest                          Supply chain management       consignee to sign a receipt as proof of delivery.
Consignee billing                   Minimum rate                      Tariff Bureau
Contract carrier                    Mode                              Third Party Billing           AQ rate
                                                                                                    An “any quantity” rate is applied to any commodity
Contract rate                       Multi-carrier shipping software   Transit time
                                                                                                    regardless of the weight of the shipment. An
Courier service                     National carrier                  Value Added Network (VAN)     AQ rate is an exception to the general rule “rates
CWT rates                           Non-contact reader/scanner        Wand reader                   vary with weight.”
Declared value                      Oversize                          Wedge reader/scanner
                                                                                                    Barcode/barcode symbol
Dimensional rating                  Packing list                      Weight break
                                                                                                    The most commonly used form of automatic-
Discount                            Proof of Delivery (POD)           ZIP Code
                                                                                                    identification technology, consisting of a series
Drop ship                           Postnet code                      Zone                          of light and dark vertical bars of different widths
Electronic Data Interchange (EDI)   Private carrier                   Zone skip                     and adjoining spaces, used to represent a number,
Electronic mailbox                  Protocol                                                        letter or symbol. Barcodes are printed on labels to
                                                                                                    create a unique identity when scanned.

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Barcode label                                           Commodity code                                           Discount
A label that has a barcode and/or human readable        An arbitrary number associated with a class of goods     A negotiated reduction of a carrier’s base rate.
information printed on it and can be attached to an     or a product’s freight class.
item.                                                                                                            Drop ship
                                                        Common carrier                                           To save money, large numbers of prepaid and
Barcode reader                                          A “for hire” carrier that provides service to the        labeled parcels are trucked from the shipper’s
A device used to identify and decode a barcode.         general public on a regular schedule at published        processing location across several UPS® or USPS®
                                                        rates.                                                   zones to a post office or other parcel carrier. The
Call tag                                                                                                         parcel carrier then delivers the parcels to the
An accessorial offered by carriers authorizing          Consignee                                                consignees. Cost savings are realized by paying the
a carrier to pick up and return a package from          The person or company to whom the freight is being       lower 1 or 2 zone rate in addition to the truckload
the consignee back to the shipper. The shipper          shipped, usually the buyer.                              charges, but the combination is often much less than
completes the call tag document and gives it to the                                                              paying the individual parcel costs to zones 7 or 8 to
carrier, authorizing the package pick up and return.    Consignee billing
                                                                                                                 hundreds of consignees.
                                                        A method of sending a shipment or packages when
Carrier                                                 the consignee will be paying for the freight.            Electronic Data Interchange (EDI)
An individual, partnership, or company in the                                                                    The exchange of business data (documents) between
business of transporting good or passengers.            Contract carrier
                                                        A for-hire carrier that does not serve the general       two parties in a standardized digital format. The
                                                                                                                 process by which companies can exchange business
Charge terms                                            public but services shippers that have contracted
                                                                                                                 documents directly from application to application
Indicate responsibility for freight payment:            with the carrier.
• Prepaid (PPD): The freight charges are paid by the                                                            electronically, without paper documents produced.
   shipper.                                             Contract rate
                                                        A base rate with a negotiated discount applied.          Electronic mailbox
• Prepaid and add (PPA): The consignee pays the                                                                 The place where EDI transmissions are stored for
   freight charges added to the order invoice.                                                                   pickup and delivery within a third-party service
                                                        Courier service
• Collect (COL): The consignee pays the freight                                                                 provider’s system.
                                                        A fast door-to-door service for high valued goods
   charges to the carrier when the shipment is
                                                        and documents.
   delivered.                                                                                                    Exempt carrier
• 3rd party (3RD): A party other than the shipper or   CWT rates                                                A for-hire carrier that is exempt from economic
   consignee pays the freight charges.                  Rating by cents or dollar, per hundredweight.            regulation.

Claim                                                   Declared value                                           Fixed beam scanner
A charge made against a shipper or carrier for loss,    The value of a package stated on a manifest or bill of   A barcode reader that uses a stationary beam and
damage, delay or overcharge.                            lading for insurance purposes.                           relies on the relative movement of the item for
                                                                                                                 scanning (e.g. grocery checkout).
Collect on delivery (COD)                               Dimensional rating
A collection service a carrier may offer to collect     Used to rate odd shaped packages by volume rather        For-hire carrier
cash payment of the seller’s merchandise from the       than actual weight when the DIM weight (length x         A carrier that provides a transportation service to the
consignee for a fee.                                    width x height divided by a weight factor) is greater    public on a fee basis.
                                                        than the actual weight.
 TOC                                                                                                                                                                       20
Freight bill                                        Logistics                                                 Oversize
The carrier’s invoice for transporting shipments.   All the activities involved in planning, handling,        An accessorial offered by carriers allowing shippers
                                                    storing and transporting goods and materials in a         to ship larger, light weight packages.
Freight class                                       supply chain.
A classification number assigned to a commodity                                                               Packing list
using the NMFC numbering system used to calculate   Machine readable                                          A list showing merchandise packed and all
freight charges.                                    Printed information that facilitates the direct           particulars. Typically, the list details contents of
                                                    transfer of information from a printed surface to a       a shipping case, package or multiple packages
Freight rate                                        data processing system without human intervention.        prepared in response to an order. It is normally
The cost or charge to move freight.                                                                           prepared by the shipper and a copy is sent to the
                                                    Manifest                                                  consignee to verify the shipment contents.
Gross weight                                        A document used primarily by small package carriers
The total weight of the vehicle and the freight.    that provides line-item details about the packages        Proof of Delivery (POD)
                                                    in the pickup, charge terms, tracking numbers,            Information proving a package was delivered. The
Hand held reader/scanner
                                                    accessorial charges (among other charges) for             POD typically includes date, name and recipient
A barcode reader held and operated by a human,
                                                    invoicing purposes.                                       signature.
facilitating greater scanning mobility.
                                                    Minimum rate                                              Postnet code
Hazardous materials
                                                    The shipment weight that the carrier’s tariff specifies   A barcode developed by the US Postal Service to
Materials that the Department of Transportation
                                                    as the minimum weight required to use their less          help automate mail sorting.
has determined may be a risk to health, safety
                                                    than truckload (LTL) or truck load (TL) rate.
and property. Examples are explosives, poisons,                                                               Private carrier
radioactive materials, corrosive liquids and        Mode                                                      A carrier that provides a transportation service to a
flammable liquids.                                  The type of service used to transport shipments           firm that owns or leases the vehicles and does not
                                                    (e.g. air, ground, LTL, TL).                              charge a fee.
Human readable
Characters or data in number or letter format       Multi-carrier shipping software                           Protocol
that can be read and understood by a human, as      Software designed to aggregate shipping rates and         Rules or conventions used between communicating
opposed to a barcode.                               delivery options from all major carriers within one       devices such as computers. For example, a simple
                                                    platform.                                                 protocol defines PC hardware configurations. A
Identification code
                                                                                                              more complex protocol defines data formats, timing
A code used to identify products and shipping       National carrier                                          and error correction.
containers. They are typically numeric and have a   A carrier serving an entire country.
defined data structure.                                                                                       Purchase order
                                                    Non-contact reader/scanner                                A transaction set generated by a customer
Invoice                                             A barcode reader with a fixed or moving beam              containing all the information required by a supplier
Bill to customer for order or shipment; includes    scanner that can read a barcode without making            to process an order of product or services.
charges for material shipped and, if applicable,    contact with the symbol.
freight charges, customizing charges and more.

 TOC                                                                                                                                                                  21
Quiet zones                                              Stacked barcode                                         Value Added Network (VAN)
In barcodes, the area at each end of the overall         Horizontally stacked barcode with a row number          It is like an “electronic post office” where shippers
symbol. This area must be free of imprinting so the      identifier denoting how many rows (2-8) are             and senders send and receive EDI transactions.
scanner can isolate the barcode for interpretation.      stacked. This allows multiple barcode scanning in
                                                         any order by sweeping top to bottom or bottom           Wand reader
Reader                                                   to top, across the entire block. Also, referred to as   A handheld scanning device, which resembles a
A device used for automatically reading data. The        two-dimensional barcode.                                large pen, used as a contact barcode reader.
data can be stored in a barcode, on a magnetic
strip, in the memory of a smart card or embedded         Standard pack/fixed content                             Wedge reader/scanner
in alphanumeric characters.                              All items or contents in the packaging unit are         A barcode reader designed to fit between a
                                                         identical in standard packaging.                        keyboard and a computer. The keyboard is plugged
Regional carrier                                                                                                 into the wedge and a cable is plugged into the
A carrier serving a specific area or region of the US.   Super-regional carrier                                  keyboard interface on the computer. Data scanned
                                                         A carrier serving large portions of the US with no      using a wedge appears on the monitor as if the
Standard Carrier Alpha Code (SCAC)                       geographic break in service.                            data was typed into the computer, which eliminates
The unique code assigned to a carrier for                                                                        the need to modify application software.
identification.                                          Supplier
                                                         The entity that produces, provides or furnishes         Weight break
Scanner                                                  an item or service, such as the owner of a UPC          A point in a weight-based rate table where the rate
An electronic device that reads barcodes and             company prefix.                                         calculation changes, usually set in increments.
converts the information into code that a computer
understands.                                             Supply chain management                                 ZIP CodeTM
                                                         A term used interchangeably with logistics referring    A five-digit number that identifies a destination.
Serial number                                            to the chain of events, industries and firms linked
Unique identification of each instance of a SKU.         together, from the acquisition of raw materials to      Zone
Some SKUs are tracked by serial number. In such          delivery of the final product.                          A geographic distance from an origin, usually in
cases, each item must be barcoded or the serial                                                                  two hundred mile increments. The higher the zone
number must be recorded for each item.                   Tariff bureau                                           number, the further distance it is from the origin,
                                                         An organization that publishes and maintains            generating a higher shipping cost.
Shipment                                                 libraries of tariffs.
Goods or merchandise in pieces, parcels, containers                                                              Zone skip
or pallets for transportation from a shipper to a        Third party billing                                     To save money, large numbers of prepaid and
destination.                                             Shipping for a client utilizing their carrier account   labeled parcels are trucked from the shipper’s
                                                         so that client is billed directly. Note that both       processing location across several carrier zones
Stock Keeping Unit (SKU)                                 UPS and FedEx now charge an additional fee as a         to a post office or other parcel carrier. The parcel
A number generated by a company to identify a            percent of the shipping cost to bill third party.       carrier then delivers the parcels to the consignees.
product. An item’s universal product code (UPC)                                                                  Cost savings are realized by paying the lower 1 or
could be its SKU.                                        Transit time                                            2 zone rate in addition to the truckload charges;
                                                         The total time that elapses from pickup to delivery     the combination is often much less than paying
                                                         of a shipment.                                          the individual parcel costs to zones 7 or 8 across
                                                                                                                 hundreds of consignees.                                 22
 TOC
United States
3001 Summer Street
Stamford, CT 06926-0700
800 672 6937

To learn more visit us online:
pitneybowes.com/us/shipping                                                                For more shipping tips visit pitneybowes.com/us/shipping/tips

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© 2019 Pitney Bowes Inc. All rights reserved.                                                                                               19SMB00065_US
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