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Residential vs Commercial Shipping?

By Last updated on: September 28, 2020

How do I know if a shipping address is residential or commercial, and why does it matter?

Residential vs commercial delivery?

  • A residential delivery: final delivery to a home or private residence, including a business operating out of a home.
  • A commercial delivery: final delivery to a business.
Residential vs Commercial Refund Retriever

Why does it generally cost less to ship to a commercial address? That’s because it’s less expensive to deliver to densely clustered commercial addresses. Residences are often scattered throughout sprawling neighborhoods.

Why is residential delivery more commercial delivery?

As an online seller, you may have noticed that residential shipping fees are higher than commercial ones. Residential addresses are spread out. Generally, residential addresses have more overhead costs. Plus, it takes more time, consumes more gas, and does more wear and tear on vehicles.

Last-mile delivery is the most expensive part of any small parcel cost. Commercial addresses are usually in high-density areas. This allows a carrier to bundle or group many deliveries in a small geographic area. Therefore, commercial delivery is less expensive than residential delivery.

FedEx Residential Fee Surcharge

FedEx ServicesCost (2021)
Domestic Air Express Services and all Ground Services$4.95 per package
International Air Express Services$4.95 per package
FedEx Home Delivery$4.35 per package

UPS Residential Fee Surcharge 

UPS ServicesCost
Air Express Services and 3 Day Select$4.70 per package
Ground Service$4.10 per package
Standard to/from Canada and Standard from Mexico:$4.10 per package
International Air Services$4.70 per package

Can residential surcharge fees be waived or negotiated?

YES! A shipper can negotiate with FedEx and UPS to have residential fees either reduced or eliminated. In short, a large volume shipper can combine transportation charge discounts with accessorial fee discounts. Successful contract negotiation is a balancing act. Some shippers choose to receive a lower transportation fee discount for a full waiver of the residential surcharge.

Refund Retriever can help you with any questions you may have regarding residential vs commercial shipping.  Therefore, to learn more about our parcel auditing services, please contact Refund Retriever at 800-441-8085 or

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 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 or call (800) 441-8085 for more information.

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