Carrier surcharges continue to climb year after year, and for many shippers, these fees have snowballed into a major expense that erodes profit margins. While some shipping surcharges are unavoidable based on your service needs or product characteristics, others accumulate simply because shippers lack the visibility or processes to prevent them. The frustrating reality is that many of the costliest surcharges are entirely avoidable with the right approach.

Understanding which carrier surcharges you can eliminate—and implementing systems to prevent them—can save thousands of dollars annually. In this article, we’ll break down five of the most common avoidable shipping surcharges from UPS and FedEx, explain exactly what triggers each fee, and provide actionable strategies to eliminate or significantly reduce these costs. Whether you’re dealing with address correction fees, late payment charges, or dimensional surcharges, there are practical steps you can take today to protect your bottom line. 

For a broader understanding of how surcharges work, check out our guide on what is a shipping surcharge.

Key Takeaways

  • Five common carrier surcharges—third-party billing, address correction, late payment, additional handling, and oversize fees—are largely avoidable with proper systems and processes in place.
  • Parcel spend management technology provides automated surcharge and invoice tracking, identifies avoidable fees, and uncovers billing errors that warrant carrier refunds.

5 Common Shipping Surcharges & How to Avoid Them

1. Late Payment

It’s critical to pay your shipping invoices on time. Shippers with carrier contracts are subject to different payment terms that vary depending on the carrier and the agreement. These terms dictate the frequency with which carrier invoices are paid. 

While this billing arrangement offers convenience and better cash flow management, it also creates opportunities for missed payments. One administrative oversight—a forgotten due date, a misrouted approval email, or an employee on vacation—can result in late payment fees that compound over time and potentially damage your carrier relationships.

How to avoid late payment fees from carriers:

  • Set up automated payment systems directly with your carriers
  • Establish monthly or weekly prepayment plans to eliminate invoice cycles
  • Arrange credit extensions with carriers if your business has variable cash flow
  • Create internal payment calendar reminders with alerts two weeks before due dates
  • Designate a backup payment administrator who can process payments if the primary contact is unavailable
  • Use your accounting software’s bill payment features to schedule carrier payments automatically

2. Third-Party Billing

Third-party billing occurs when a carrier collects shipping costs directly from your customer rather than from you as the shipper. While this arrangement might seem convenient for certain business models, both UPS and FedEx charge significant fees for this service: FedEx adds 4.5% of the total bill, while UPS charges 5%.

These percentages add up quickly. If you ship $100,000 worth of packages annually using third-party billing, you’re paying an extra $4,500 to $5,000 just for the privilege of having carriers handle payment collection. That’s money leaving your bottom line for a service you could manage internally.

The simplest way to avoid third-party billing surcharges? Handle billing directly by collecting shipping costs from customers yourself.

3. Address Correction 

Address correction fees kick in when carriers need to modify an invalid, incomplete, or incorrect delivery address. These fees have increased substantially over recent years, and they’re especially painful when a system error causes them to accumulate across multiple shipments. A single data integration issue could result in hundreds of address corrections in a matter of days.

The good news is that address correction surcharges are among the easiest fees to prevent with proper validation systems. Both UPS and FedEx typically send email notifications when they identify an invalid address, giving you the opportunity to update addresses for individual packages through their online portals. For a detailed breakdown of current rates and policies, review our article on address correction fees.

How to avoid address correction fees:

  • Implement address validation software at checkout to catch errors before shipment
  • Regularly clean and update your customer address database
  • Create consistent formatting rules for how addresses are entered and stored in your systems
  • Train your warehouse and customer service teams to recognize common address red flags

4. Additional Handling

The Additional Handling surcharge applies when a package’s characteristics require special processing beyond standard handling procedures. 

This surcharge triggers when packages exceed certain dimensions, surpass specific weight thresholds, require special packaging to protect perishable or hazardous goods, or have non-standard shapes that prevent normal conveyor belt processing. Even packages that seem relatively standard can incur this fee if they fall just outside carrier guidelines.

And unfortunately, this fee has become increasingly expensive. Take the 2025 GRI report findings, for example. Additional Handling surcharges ranged from 26% to 29%, depending on the carrier.

How to avoid or minimize additional handling surcharges:

  • Optimize your packaging to stay within standard dimensions and weight limits
  • Test different packaging configurations to find options that avoid triggering the surcharge
  • During contract negotiations, discuss handling fee waivers or reductions if your products inherently require special handling

5. Over Maximum Limits and Oversized Packages

When packages trigger the Additional Handling surcharge due to size or weight, you’ll often see an additional oversize fee applied on top of it. UPS calls this the “Over Maximum Limits” fee, while FedEx uses “Oversize” terminology. These surcharges can exceed $100 per package, making them some of the costliest avoidable fees shippers face.

UPS specifications: Packages weighing over 150 lbs (70 kg) or exceeding 108 inches (274 cm) in length will incur this surcharge.

FedEx specifications: Generally, packages over 96 inches (244 cm) long or with a combined length and girth exceeding 130 inches (330 cm) will be charged the oversize fee.

How to minimize oversized and large package fees:

  • Ship products in multiple smaller boxes when possible—calculate the break-even point where multiple box costs plus shipping is less than a single oversize fee
  • Design packaging specifically to stay under the carrier’s dimensional thresholds
  • For products that consistently ship oversized, bring this up during contract negotiations to request concessions or reduced rates

Not all shippers can avoid this charge due to the nature of their products, but even reducing the frequency by 20-30% through better packaging practices can significantly reduce your shipping bill.

For current carrier-specific details, explore our guide on FedEx shipping surcharges 2025.

Avoid Shipping Surcharges with Parcel Spend Management

Avoiding carrier surcharges isn’t always possible, but managing them effectively is critical to protecting your margins. The challenge is that manual invoice review is time-consuming and error-prone—analyzing manifests line by line simply isn’t scalable as shipping volume grows.

Parcel spend management technology can transform the way shipping teams handle surcharges. An intelligent platform like Reveel automatically tracks and categorizes every surcharge, identifies which fees are avoidable in your operation, and uncovers refund opportunities where carriers have incorrectly applied charges. Get a demo of our parcel spend management platform here.