In June of 2018, UPS increased a few surcharges and, additionally, announced a new shipping charge correction audit fee. A UPS audit fee will be charged when the average shipping charge correction during a week is greater than $2.00 per package subject to a shipping charge correction. This Shipping Charge Correction Audit Fee does not apply to import shipments.
Can UPS really charge a shipper more?
In short, yes. According to the UPS service guide: Shippers are responsible for providing accurate and complete shipment information on the shipping document. Shippers must provide service selected, weight, and dimensions of packages.
UPS reserves the right to audit any package service, dimensions, weight or the applicability of other charges. As part of that audit, UPS may weigh and measure any package. If any information provided is incomplete or incorrect, UPS may in its sole and unlimited discretion adjust charges at any time.
What does the UPS audit fee cost?
The Audit Fee will be the greater of:
- $1.00 per package subject to a shipping charge correction during the invoice period
- or 6% of the total amount of shipping charge corrections during the applicable invoicing period.
How can I find this on my invoice?
This is how it reads from the UPS invoice:
Invoice > Invoice Summary > Adjustments section
SHIPPING CHARGE CORRECTION AUDIT FEE
FEE BASED ON 63 PACKAGES
AND $282.40 CORRECTION AMOUNT
Why did UPS implement this new fee?
In short, UPS wants shippers to be as accurate as possible. Let’s face it, there is enough technology and equipment available now that a shipper should be able to provide the correct information to UPS. Basically, the UPS audit fee is an attempt to force businesses to be more precise and accurate in their calculations. UPS is effectively requiring shippers to correctly label their packages and will now punish shippers who don’t. This could be incorrect dimensional information either deliberately or by accident.
What would qualify as a shipping charge correction?
- Incorrect weight entered causing a reweigh and fee
- Incorrect or missing package dimensions resulting in corrected DIM weight
- Missing package dimensions resulting in additional surcharges (like Additional Handling, Large Package Surcharge, and Over the Maximum)
How to protect against the UPS Audit Fee?
The easiest way to mitigate this fee is to upload weight and dimensions for packages accurately. Have good software and hardware to enter correct weight and dimensions. This will not only save you money but provide more accurate shipping costs on the front end.
What else can be done? Shippers can limit the Shipping charge correction audit fee by negotiating a custom dimensional divisor over the standard 139. If a shipper has a higher DIM divisor, there is less likelihood a package will have a greater dimensional weight causing an error.
Next, a shipper could also negotiate the actual UPS audit fee out of the agreement. This would be a great option for a shipper that does not want to invest in technology and is just plain lazy. Not a great idea, but it is available.
Where can you start?
Auditing logistics costs is an intensive and time-consuming process for any shipper. Choose to work with a trusted partner like Refund Retriever. Our technology reviews your UPS invoices to catch errors and identify savings opportunities. We help shippers quantify how much all their carrier’s surcharges impact their shipping costs. Shipping charge correction audit fee is not going away, contact us today to learn more.