What is a Residential Surcharge?

by
August 19, 2021
hand holding up a cardboard shipping box with a green background

A residential surcharge is a fee applied to the base rate of a shipping label for an order being delivered to a home, home business, or any location deemed residential by a carrier or carrier driver. Residential surcharges are applied to FedEx and UPS services and typically cost about $4.00. However, USPS does not charge residential surcharges. To find out more about residential surcharges and how to avoid paying them, we have compiled this blog post. 

What is deemed a residential address? 

Residential addresses are not just home addresses or apartments. Carriers can deem things as varied as farms and mixed-use buildings as being residential. 

Are there any perks to Residential Surcharges? 

While residential surcharges are never ideal for merchants, they do have some advantages with FedEx and UPS. If you use a Home delivery service, their included residential surcharge makes parcels eligible for Saturday delivery at no extra cost. 

How much is FedEx’s residential surcharge? 

FedEx charges residential surcharges differently based on the service being used. Below are the minimum charges for residential surcharges. They can increase based on additional factors. For more information on surcharges, check FedEx’s shipping fees

FedEx Service

Residential Surcharge Rate

FedEx Home Delivery

$4.00 (included in base rate)

FedEx Express Package

$4.65

FedEx Ground

$4.65

How much is UPS’s residential surcharge?

UPS charges residential surcharges similarly to FedEx. The rates are based on the service type used. The rates listed below are based on retail rates. For more information on how UPS charges for different types of fees and surcharges, read their retail rate guide

UPS Service

Residential Surcharge Rate

UPS Ground

$4.45

UPS AIr

$5.00

Does USPS have a residential surcharge? 

The USPS does not charge differently based on whether or not the address is residential. Because the postal service commits to delivering to all US addresses daily, there is not any attributed residential surcharge. However, heavier parcels tend to be more expensive with the USPS than with other carriers. 

How can I avoid paying residential surcharges?

Residential surcharges are part of using FedEx and UPS. However, there are ways to avoid paying them in full. Whether you use USPS, a hybrid service, or have negotiated rates, it is possible to avoid paying residential surcharges. 

Use USPS or hybrid services

The USPS doesn’t charge residential surcharges when it delivers, so try and use a hybrid service like UPS SurePost, UPS Mail Innovations. or FedEx SmartPost

Get negotiated or discounted rates

One way to avoid residential surcharges is to get negotiated rates. A commonly negotiated rate structure involves having fuel and residential surcharges discounted or removed. The only downside to this is that this usually is a volume-based negotiation. Another way to pay less on residential surcharges is to use ShipStation for your UPS shipments. Our discounted UPS rates commonly reduce or remove residential surcharges on UPS ground parcels.