Many shippers have no clue how the carrier package minimum charge from FedEx and UPS minimum affects their overall shipping spend. Most companies don’t realize carrier package minimums override a large percentage of negotiated discount rates. Shippers must know the contractual UPS minimum net or FedEx minimum package charge.
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So what is the 2027 Minimum Net Charge?
Carrier package minimums apply a minimum net charge to all packages; this is the lowest amount a shipper will pay to send any package. For each shipment, you will pay the greater of (a) the net shipment charge based on the negotiated incentives or (b) the minimum net shipment charge. The general default minimum net charge is a Zone 2 one-pound package. Here are the standard minimums for FedEx and UPS and their specific minimum package charge.
| UPS Minimum Net Charge | FedEx Minimum Package Charge | |
| Ground Residential | $ 12.70 | $ 12.70 |
| Ground Commercial | $ 12.70 | $ 12.70 |
How Does a Minimum Net Charge Affect Your Shipping Costs?
No Matter Your Discounts, You Won’t Pay Less
- Even if you negotiate high percentage discounts with UPS, the minimum charge overrides them.
- Example: If your negotiated rate for a shipment is $9.50, UPS will still charge you $12.70 because of the minimum package charge.
Smaller & Lightweight Shipments Are Most Affected
- If your shipments are low-weight (1-5 lbs) and travel short distances (Zones 2-4), you won’t get the full discount because of the minimum charge.
- Businesses shipping high volumes of small packages will feel the impact of the minimum package charge more significantly.
Annual Rate Increases Compound the Cost
- UPS raises its minimum charge annually (e.g., from $10.70 in 2024 to $11.32 in 2025).
- A slight increase adds up to thousands in extra costs annually, especially for high-volume shippers.
Where to find the minimum net charge in your agreements
Each carrier uses different contractual language to specify minimum charge information. FedEx calls this “Minimum Package Charge” or “United States Minimums.” Each service level has a Minimum Package Charge. UPS makes this easier to find: one section lists all services under “Minimum Net Charge.”
Minimum Real World Example
For example, we put this together many years ago when the minimum was only $7.57. This UPS Ground shipper has a 30% discount. Remember, the company will pay the greater of the negotiated rate or the $7.57 minimum charge. All one-pound packages to any zone receive a discount under the negotiated 30% rate, although they remain subject to the minimum package charge.
These charts indicate all the zones and weights the net minimum charge affects. The effective discount for a zone 2 one-pound package is zero percent, or no discount. The effective discount with the net minimum charge will significantly impact shippers with low-weight shipments.
Negotiating Better Minimum Terms
Package minimums are negotiable, even if your carrier rep insists they aren’t. The biggest questions are: How many of your shipments are hit with the minimum net charge, and how large a reduction do you need to maximize your negotiated discounts?
Refund Retriever can help identify your shipments affected by the minimum net charges. Our contract consultants can help lower your shipping costs by understanding the overly complicated carrier agreements and determining how to make them work for your company. We are always happy to help shippers; give us a call anytime to discuss the minimum package charge.
Carrier Package Minimum Charge in a Nutshell
Most shippers are affected by minimum charges every day. The minimum charge effectively robs a company of those discounts. Since the carriers raise rates yearly, the minimum charge will continue to grow. In conclusion, fully understanding your company’s shipping costs requires identifying carrier package minimums and the total loss of discount rates. Contact us to determine your contractual UPS minimum net or FedEx minimum package charges.
