UPS began charging a Third Party Fee in the amount of 2.5% of the total shipping charges including any accessorial and value-added services in the beginning of 2016.
In 2019 the UPS Third-Party Fee raised to 4.5% and is currently still 4.5% of the total shipping charges for all UPS domestic and international shipments.
UPS Third-Party Fee EXAMPLE:
UPS Billing Center: Invoice > Invoice Summary > Third Party section
Total UPS 3rd Party Charges: $38604.53 = $1,737.20 (4.5% of total charges)
Why Does UPS Charge a Third Party Fee?
Many shippers take advantage of often larger volume shippers rates and incentives as they have better contractual terms due to the amount of shipping they bring to UPS. Therefore, in order to counter the loss of revenue, UPS implemented this additional 3rd Party Fee.
How Can You Reduce or Eliminate the UPS Third-Party Fee?
There are a few ways you can look to reduce or eliminate the UPS 3rd Party Fee. One of the more obvious ways is to negotiate it out of your UPS Carrier Agreement completely or at least get a percentage off of the published rates.
If you are unable to negotiate it out of your UPS Agreement or get a reduced percentage, perhaps you could add your drop-ship facilities as being an exception to the rule.
Another option is to change your UPS billing address to the location of your drop-ship facilities. Using Billing Center Online will remove the PDF Invoices going directly to that location while adding the shipper number to your UPS Billing Center. Discuss this with your UPS Account Executive for further details and feasibility.
How Can I Get Started?
Working with a reputable logistics auditing company such as Ship Watchers will provide you with insight to your packages to determine which are being charged a UPS Third Party Fee so you can work internally to determine if the charges are correct, what shippers are charging your UPS Shipping Account to generate the fee, and discuss with your UPS Account Executive.
In addition to getting this valuable information to eliminate or reduce future UPS Third Party Fees, you will have access to other cost savings insight through working with Ship Watchers for our transportation analytics, contract evaluation, and on-going UPS Audit Process.
Something to also Think About
If you are the shipper or consignee and are shipping using another company's account be on the lookout for Chargebacks. The billed party has 180 days to submit a dispute on the charges in which case they would be billed back to your UPS Shipping Account. Ship Watchers can provide Chargeback and Unauthorized Reporting to point out these types of charges and who the culprit is.
Ship Watchers is a logistics auditing company that keeps carriers compliant on rates, surcharges, incentives, and incorrect charges found within carrier invoices.
Want to stay on top of carrier increases, rate changes, and benchmark studies while insuring that your invoices are free from errors and incorrect charges? Give us a shout to learn more at firstname.lastname@example.org or by calling us at 800.550.7217 ext 874.
No term agreements, no additional effort, and no additional fees... Just a small percentage of the savings we bring to your carrier accounts directly through our auditing process.
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