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FEDEX REFUNDSUPS REFUNDS

FedEx Agreements: Part 3 – How Do Minimums and Surcharges Work?

By Last updated on: January 31, 2019

In the final part of a three-part series, Refund Retriever is unveiling the intricate details of a FedEx transportation services agreement. Our goal is to break down the general outline of FedEx agreements to make understanding them more manageable.

Earlier in part one, we reviewed the overall organization of a FedEx agreement. So then part two explored how the base and earned discounts work for FedEx shippers. In the final part of this three-part series, we will explain how minimum charges and FedEx surcharges work. Also, we will cover the FedEx Money Back Guarantee as well.

What is a Minimum Charge? 

Very simply, a minimum charge is when a customer agrees to pay the greater amount of the net charge based on discounts or a set minimum within the contract. FedEx will set the minimum charge for all services in the contract. Specifically, a Zone 2 – 1 pound package and further specify any reductions in the price of a Zone 2. 

  • Zone 2 – 1 Pound Package
  • Ground Minimum Charge: $7.85
  • Home Delivery Minimum Charge: $11.65

The FedEx agreement will separate express and ground service minimum charges. We usually see more express reductions than ground, large volume shippers will be able to negotiate a minimum ground surcharge. These fine print details are what deliver clarity to customers so it’s important senders understand the variations among zone charges. 

FedEx Surcharge Modifications 

All packages shipped have additional Fedex surcharges in addition to the base transportation fee. Among them may include two types of surcharges. 

  • Optional service fees: Fees added when you select specific options such as Saturday Pickup or Declared Value.
  • Mandatory service fees: The shipper has no control over the usage of these FedEx surcharges. These include residential, fuel surcharge or delivery area surcharge (DAS).

Price of FedEx surcharges is all set in the service guide provided by FedEx. Although within the FedEx agreement, you can negotiate to modify or eliminate the price of these surcharges. These discounts will be a set for a time period as stated in the agreement in Term 1 and 2. Generally, once the term is over the discounts for the set surcharge modifications will disappear. Subsequently, the shipper then pay the amount as set in the Service Guide. 

FedEx Surcharge Modifications

Finally, it’s important to be aware of the term lengths and when your discounts will disappear. Set calendar reminders for these changes and term expirations to ensure you don’t overlook these key details. 

FedEx Money Back Guarantee

All FedEx ground, home delivery, and express packages are guaranteed to arrive on time or it’s free. However, many new FedEx service agreements eliminate this guarantee. Fortunately, a shipper can request that this is removed from the agreement. A shipper does not have to waive the right to ensure FedEx delivers packages on time. Your customer expects on time delivery and so should you.  

This provision will be located in multiple sections on your FedEx agreement. Be sure to read the whole agreement, read it twice! To summarize, we have seen the money back guarantee waiver in one section and opposite information a few pages down.  

Free FedEx Agreement Analysis

As you continue to explore FedEx surcharges within your agreement, stay in touch with Refund Retriever for the latest news and support. Be sure you don’t miss any insight from Refund Retriever by staying in touch with us here

In conclusion, if you need help with a FedEx agreement feel free to reach out to us. Call us at 800-441-8085 or send an email to us, brian@refundretriever.com. We will analyze your FedEx agreement at no cost. 

Brian Gibbs

Author Brian Gibbs

More posts by Brian Gibbs

Brian Gibbs | President of Refund Retriever

Brian Gibbs founded Refund Retriever in 2006 while running his first eBay based business and seeing the shortcomings of other shipment auditing companies. Refund Retriever's primary focus is FedEx and UPS parcel invoice auditing. After graduating from Texas A&M University in 2001, he then graduated from the University of Houston in 2004 with a JD and MBA. Gibbs has been featured in Forbes, Entrepreneur and other publications discussing parcel auditing, shipping, e-commerce and more. Learn more at www.refundretriever.com or call (800) 441-8085 for more information.

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