Overview
This article explains FedEx and UPS’s additional handling surcharge; what it is, when it applies, the industries which are most likely to be impacted by this charge and important considerations around reducing these costs.
What is the Additional Handling Surcharge?
The additional handling surcharge (AHS) is a fee that FedEx and UPS apply to packages that ostensibly require additional work to handle during shipping.
There are three reasons that the carriers apply an additional handling surcharge. Each has specific criteria, which we will list later in the article:
- Dimensions – The size of the box is large or bulky
- Weight – The box is heavy
- Packaging – There is something ‘non-standard’ about the way the item is packaged
Parameters for Additional Handling Surcharges
The guidelines for each kind of AHS surcharge differ. The full explanation is found in the section of the service guides shown below. We will summarize here and highlight the key points. FedEx and UPS have very similar guidelines on these, so changing carriers is not a way to avoid this charge. If any of these below apply, the shipment will be charged an AHS fee. Only 1 AHS fee is charged per shipment, and for shipments that meet more than one qualification, the fee will be the most expensive one.
- Weight – For US domestic shipments, an actual weight of 50 LB’s or more. For international shipments, an actual weight of 70 LB’s or more
- Dimensions – There are 3 ways the dimensions can qualify for AHS – Length over 48 inches, width (2nd to longest side) over 30 inches, or girth over 105 inches. Note that calculating girth is not always intuitive and is a major source of AHS charges.
- Packaging – There are a number of components to packaging but most AHS surcharges are assessed for 1 of 3 reasons:
- The outside packaging is not cardboard (or for smaller packages a poly envelope or bubble mailer)
- The packaging does not contain the full item (such as a tire or basketball that sticks out of the packaging
- The package is a cylinder (such as mailing tubes, cans, buckets etc.)
Pricing Structure for Additional Handling Surcharge
- Additional Handling Charges vary based on:
- The kind of AHS surcharge — We noted above that there are AHS surcharges tied to dimensions, weight and packaging. Pricing differs on each. Currently packaging is the cheapest of the 3, followed by dimensions and then weight
- How far it ships — AHS is an example of a ‘zonal-based charge’, meaning that the further the package is shipped, the more expensive it is.
- Time of year — Additional Handling is one of a number of surcharges that are also subject to ‘peak charges.’ This means that during peak season, there is an additional surcharge added on top of this charge.
Who gets hit by additional handling charges?
While some companies are obvious candidates for additional handling charges, such as furniture companies, home goods companies, sports equipment companies, and car parts (as well as boats, ATV’s etc), the additional handling surcharge is applied for packages that may not seem very large (a 25“x20”x20” box would get hit by AHS, as would a 36”x24”x12” package).
Negotiating Additional Handling Costs
You can negotiate discounts for additional handling charges. It is important to keep in mind that the peak additional handling is technically a separate surcharge, and therefore, you would need to have discounts on peak AHS negotiated (and included in your contract) separately.
Understanding surcharges for large, bulky packages
The Additional Handling surcharge is the ‘smallest’ of 3 surcharges (both in package size and in fee) that FedEx and UPS have based on size. The difference in the cost of these surcharges jumps quite a bit, so it is important to understand which surcharges your packages are prone to hitting, and to consider whether there are ways to decrease package size to reduce the impact of surcharges.
The three surcharges are as follows (note that FedEx and UPS have different naming conventions for the surcharges, but the pricing and guidelines are almost identical)
- Additional Handling surcharge (which we cover in this article and has the same name for both carriers)
- Large Package Surcharge (UPS) or Oversize Surcharge (FedEx)
- Over Maximum Limits (UPS) or Ground Unauthorized Package Charge (FedEx)
