On January 22nd, 2018, FedEx began charging a Third Party Billing Surcharge in the amount of 2.5% of the total shipping charges including any accessorial surcharges, and value-added fees. This excludes any charges due to duties, taxes, and ancillary clearance service fees.
FedEx has not increased this fee as of 2020 and remember that the sender or shipper is responsible for all charges if the consignee or third party does not pay or refuses to pay for the shipping charges.
FedEx Billing Options
Three ways to pay for shipping charges with FedEx:
- “Bill Sender” means charges will be billed to the sender. The sender’s FedEx account number must appear on the airbill, and the account must be in good credit standing. The sender may request an initial rebilling to another party, but all subsequent rebills will be only to the sender. (See section G, Billing and Special Handling Fees.)
- “Bill Recipient” means charges will be billed to the recipient. (This is not C.O.D. service.) The recipient’s FedEx account number must be provided on the airbill at the time of shipment, or by the recipient at the time of delivery, and must be in good credit standing. If an account number in good credit standing is not provided, the recipient must pay for the shipment at the time of delivery.
- “Bill Third Party” means charges will be billed to someone other than the sender or recipient. Charges for shipments within the U.S. may be billed only to a third party in the U.S. In order to choose this billing option, the FedEx account number of the third party must appear on the airbill at the time it is tendered and the account must be in good credit standing
FedEx Third Party Billing Surcharge EXAMPLE:
FedEx Billing Online: Download Tab > Quick Search > Tracking Number Look-Up
Total Shipping Charges $125.26 (Excluding Duties and Taxes)
Third Party Billing $3.13 (2.5%) of Total Shipping Charges $125.26
Why Does FedEx 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 FedEx. Therefore, in order to counter the loss of revenue, FedEx implemented this additional 3rd Party Billing Fee.
How Can You Reduce or Eliminate the FedEx Third-Party Billing Fee?
There are a few ways you can look to reduce or eliminate the FedEx 3rd Party Billing Fee. One of the more obvious ways is to negotiate it out of your FedEx Carrier Agreement completely or at least get a percentage off of the published rates.
If you are unable to negotiate it out of your FedEx 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 FedEx billing address to the location of your drop-ship facilities. Using FedEx Billing Online will remove the PDF Invoices going directly to that location while adding the shipping account to your FedEx Billing Online. Discuss this with your FedEx 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 FedEx Third Party Billing Fee so you can work internally to determine if the charges are correct, what shippers are charging your FedEx Shipping Account to generate the fee, and discuss with your FedEx Account Executive.
In addition to getting this valuable information to eliminate or reduce future FedEx Third Party Billing Fees, you will have access to other cost savings insight through working with Ship Watchers for our transportation analytics, contract evaluation, and on-going FedEx 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 FedEx 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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