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.
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:
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.
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).
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.
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)
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