What Are Delivery Area and Extended Area Surcharges? - Franklin Parcel

What Are Delivery Area and Extended Area Surcharges?

Extended Area Surcharge

Delivery Area and Extended Area Surcharges May Still Apply

If your company ships frequently to rural and remote locations, there are two additional fees that could significantly increase your package delivery costs. These are what the carriers call the delivery area surcharge (DAS) and the extended delivery area surcharge (EDAS). Essentially, UPS and FedEx apply these additional charges to packages either picked up or delivered in certain ZIP codes. These fees do seem appropriate when delivering to out-of-the-way businesses, residences, and farms, where the carrier would experience higher costs to deliver those packages. But by utilizing ZIP codes to make that determination, the carrier will often apply this additional charge to more densely populated urban areas, simply because they share a ZIP code with some rural areas.

It is very important for shippers to understand how fees like these can impact their delivery costs. For 2017, these surcharges are unique to UPS and FedEx, as we will explore below.

FedEx Delivery Area and Extended Delivery Area Surcharges Explained

A delivery area surcharge applies to package shipments destined for select U.S. ZIP codes. In addition, a delivery area surcharge applies to FedEx Express® and FedEx Ground® shipments destined for areas in Alaska and Hawaii that are remote, sparsely populated, or geographically difficult to access. Go to fedex.com/rates-surcharges for a list of ZIP codes where this surcharge applies. A maximum charge may apply for shipments receiving FedEx Ground Multiweight® pricing. For FedEx Ground packages that exceed 70 lbs. and are destined for an Alaska ZIP code that receives the delivery area surcharge, the applicable fee will be 3.5 times the Alaska commercial or Alaska residential charge (FedEx Home Delivery® packages cannot exceed 70 lbs.).

Unlike UPS, FedEx has multiple delivery networks that handle Express, Commercial Ground, and Residential package deliveries independently. Thus, there are two separate DAS and EDAS charges depending whether FedEx Ground with Residential Delivery or FedEx Home Delivery is used. Knowing a little FedEx history can help you understand why this is different from UPS’s single network.

Federal Express began handling packages in 1973 as an expedited delivery service of packages and airfreight. As the business rapidly grew, the company looked to further expand service offerings. In January of 2000, Roadway Package System (RPS) was acquired by FedEx and became FedEx Ground. This acquisition allowed FedEx more options for customers not requiring Express Air delivery services. Acquiring RPS gave FedEx competitive advantages, such as an independent contractor workforce, pricing flexibility, and the industry’s first barcoded package tracking technology. A little later in 2000, FedEx launched a division of FedEx Ground called FedEx Home Delivery. This delivery unit was designed specifically as a business-to-consumer service.

When shipping standard ground, the differences that exist between the FedEx Ground Delivery and FedEx Home Delivery networks can be confusing and costly for some shippers. For example, a shipper sends a package to an address that they think is commercial utilizing FedEx Ground Service. However, it is actually a residential delivery to a business run out of a home in a delivery area surcharge ZIP code. So, in this example, FedEx Ground will still make the delivery even though it wasn’t made in the right network. However they will add both a Ground Residential Surcharge of $3.85 and a Delivery Area Residential Surcharge of $3.90.

Now, if that same shipment was placed in the FedEx Home Delivery network, FedEx would apply a Home Delivery Surcharge of $3.45 per package, in addition to the FedEx Home Delivery Residential delivery area surcharge of $3.25. That adds up to an additional $1.05 in fees by shipping FedEx Ground with Residential versus FedEx Home Delivery. Having insight into your shipping and carrier charges is very important. When shipping high-volume packages and utilizing the wrong network, the additional fees can add up quickly and cost shippers many profit dollars.

Here is a snapshot of the FedEx Service and corresponding DAS and EDAS charges for 2017.
FedEx Delivery Area Surcharges
UPS fees for the Commercial and Residential Surcharges are listed below.
UPS Delivery Area Surcharge
UPS Remote Area Surcharge

These fees are subject to change by the carrier at any time, as are the ZIP codes to which this fee applies. This is a very quiet way for carriers to increase their profitability without many clients noticing how these fees add up.

Historical Review of Delivery Area Surcharge Fees

This section is a historical review of how the delivery area fees have increased over the past several years.

FedEx Ground – Commercial & Extended
  • 2012: $2.00
  • 2013: $2.00
  • 2014: $2.07
  • 2015: $2.20
  • 2016: $2.30
  • 2017: $2.45

2017 Increase: $0.15 (6.52%)

FedEx Express – Commercial & Extended
  • 2012: $2.00
  • 2013: $2.15
  • 2014: $2.25
  • 2015: $2.35
  • 2016: $2.45
  • 2017: $2.60

2017 Increase: $0.15 (6.12%)

FedEx Express & Ground Residential
  • 2012: $3.00
  • 2013: $3.25
  • 2014: $3.40
  • 2015: $3.55
  • 2016: $3.70
  • 2017: $3.90

2017 Increase: $0.20 (5.41%)

FedEx Home Delivery
  • 2012: $2.75
  • 2013: $2.75
  • 2014: $2.85
  • 2015: $3.00
  • 2016: $3.15
  • 2017: $3.35

2017 Increase: $0.20 (6.35%)

FedEx Express & Ground Extended Residential
  • 2012: $3.25
  • 2013: $3.50
  • 2014: $3.65
  • 2015: $3.80
  • 2016: $4.00
  • 2017: $4.20

2017 Increase: $0.20 (5.00%)

UPS Commercial Ground
  • 2012: $2.00
  • 2013: $2.00
  • 2014: $2.07
  • 2015: $2.20
  • 2016: $2.30
  • 2017: $2.40

2017 Increase: $0.10 (4.35%)

UPS Commercial Air
  • 2012: $2.00
  • 2013: $2.15
  • 2014: $2.25
  • 2015: $2.35
  • 2016: $2.45
  • 2017: $2.45

2017 Increase: $0.00 (0%)

UPS Residential Ground
  • 2012: $2.75
  • 2013: $2.75
  • 2014: $2.85
  • 2015: $3.00
  • 2016: $3.15
  • 2017: $3.25

2017 Increase: $0.10 (3.17%)

UPS Residential Air
  • 2012: $3.00
  • 2013: $3.25
  • 2014: $3.40
  • 2015: $3.55
  • 2016: $3.70
  • 2017: $3.80

2017 Increase: $0.10 (2.70%)

UPS Residential Extended Area Ground
  • 2012: $3.25
  • 2013: $3.50
  • 2014: $3.62
  • 2015: $3.80
  • 2016: $4.00
  • 2017: $4.20

2017 Increase: $0.20 (5.00%)

UPS Residential Extended Area Air
  • 2012: $3.25
  • 2013: $3.50
  • 2014: $3.65
  • 2015: $3.80
  • 2016: $4.00
  • 2017: $4.20

2017 Increase: $0.20 (5.00%)

UPS Commercial Extended Area Ground
  • 2012: $2.00
  • 2013: $2.00
  • 2014: $2.07
  • 2015: $2.20
  • 2016: $2.30
  • 2017: $2.50

2017 Increase: $0.20 (8.70%)

UPS Commercial Extended Area Air
  • 2012: $2.00
  • 2013: $2.15
  • 2014: $2.25
  • 2015: $2.35
  • 2016: $2.45
  • 2017: $2.65

2017 Increase: $0.20 (8.16%)

Gaining insight into your shipping data to understand the impact fees like delivery area and extended area surcharges can have is crucial to efficient management decision making and reducing costs. Franklin Parcel has developed the technology and reporting functionality you need to obtain measurable results. In very little time, your business can start reaping the benefits our knowledge and technology provide. Partner with Franklin Parcel today to reduce your parcel transportation spending and achieve the results your company deserves.

Sign up for our Newsletter and Ben will personally send you his top shipping optimization tips and tricks.