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How to Reduce Residential Surcharges on Shipping
Learn strategies to reduce or avoid residential delivery surcharges from UPS and FedEx. Save $4-5 per package.
January 17, 20263 min read31 views
Reducing Residential Surcharges: Complete Guide
Residential surcharges add $4-5 to every home delivery with UPS and FedEx. Here's how to minimize this cost.
Understanding Residential Surcharges
| Carrier | 2025 Residential Fee |
|---|---|
| UPS | $4.35 |
| FedEx | $4.40 |
| USPS | $0 (included) |
| DHL | Varies |
Annual Impact
| Packages/Month | Annual Surcharge Cost |
|---|---|
| 100 | $5,220 |
| 500 | $26,100 |
| 1,000 | $52,200 |
| 2,500 | $130,500 |
Strategy 1: Use USPS
USPS doesn't charge residential surcharges:
| Package | UPS Cost | USPS Cost | Savings |
|---|---|---|---|
| 1 lb | $9.25 + $4.35 | $8.50 | $5.10 |
| 3 lbs | $12.50 + $4.35 | $10.25 | $6.60 |
| 5 lbs | $15.00 + $4.35 | $12.50 | $6.85 |
Strategy 2: Ship to Access Points
| Carrier | Access Point Option | Surcharge |
|---|---|---|
| UPS | UPS Access Point | $0 |
| FedEx | Hold at Location | $0 |
| Both | Customer workplace | $0 |
Strategy 3: Encourage Business Addresses
| Tactic | Implementation |
|---|---|
| Discount | Offer $3 off for work address |
| Messaging | "Ship to work for faster delivery" |
| Checkout | Default to business if provided |
Strategy 4: Negotiate Surcharge Caps
For high-volume shippers:
| Volume | Possible Negotiation |
|---|---|
| 1,000+/month | 10-20% reduction |
| 5,000+/month | 20-35% reduction |
| 10,000+/month | 35-50% reduction |
Strategy 5: Hybrid Shipping
Use services that avoid the surcharge:
| Service | Residential Surcharge |
|---|---|
| UPS SurePost | Included (USPS final) |
| FedEx Ground Economy | Included (USPS final) |
| UPS Ground Saver | Reduced |
Address Classification
How carriers determine residential vs commercial:
| Indicator | Classification |
|---|---|
| Single-family home | Residential |
| Apartment | Residential |
| Retail store | Commercial |
| Office building | Commercial |
| Home business | Usually residential |
Mixed-Use Address Tips
For home-based businesses:
Calculating True Cost
When comparing rates, always include residential:
| Quote | + Residential | True Cost |
|---|---|---|
| UPS $12.50 | $4.35 | $16.85 |
| FedEx $12.00 | $4.40 | $16.40 |
| USPS $13.50 | $0 | $13.50 |
atoship Advantage
Our rates include residential considerations:
- See total cost including all surcharges
- Automatic USPS recommendation when cheaper
- Access Point options highlighted
- True cost comparison
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