What is Delivery Area Surcharge? How is it Calculated?

It’s so important to understand the full breakdown of your transportation costs. For an ecommerce brand focused on customer satisfaction and product iteration, going through your shipping invoice line-by-line each month is likely one of the last things on your list.  

Ecommerce brands may think that surcharges or additional shipping fees are fixed or static, but most additional accessorial charges change from year to year and season to season. Understanding how each surcharge is calculated is an important step in negotiating the best rates for your brand.  

Read a full list of the main accessorial shipping charges of 2022 

What is Delivery Area Surcharge and Extended Delivery Area Surcharge?  

Out of hundreds of surcharges you may incur from your shipping carrier, one of the most common is delivery area surcharge (DAS).

  1. DAS is applied to deliveries and pickups that occur outside a carrier’s standard area of shipping.
  2. Often reserved for rural and remote locations, delivery area surcharges are based primarily on zip code and address.  

These surcharges offset the carrier’s costs—more fuel, longer hours (cost of labor) and it’s more miles on a truck—to get packages to higher cost-to-serve areas or remote areas.  

There are a few sub-category surcharges that fall under the category of DAS:

  • extended delivery area surcharge (EDAS) which is a specific designation determined by zip codes
  • remote area surcharge, which are most commonly Hawaii and Alaska

How is Delivery Area Surcharge Calculated? 

What some shippers may not realize is that DAS isn’t a fixed surcharge. It may seem like there is an obvious and static delineation between what is remote and what isn’t, but each carrier has a slightly different definition.  

One carrier might select certain zip codes to be included in the DAS, while another might not. If you know you’ll be shipping products to specific zip codes (especially remote ones) often, you’ll want to cross-compare between carriers and the services you use. 

To give an example, here is the UPS list of Delivery Area Surcharge ZIP codes in 2022. 

Insider Insight:

In Q4 of 2021, 11% of UPS and 17% of FedEx shipments incurred DAS. Both carriers added more ZIP codes to their DAS criteria; out of 41,600 ZIP codes in the US, 25,600 fall under some sort of DAS charge. In 2022 DAS ranges from $4-$45 per shipment. 

When are DAS Charges Applied? 

It’s important to realize that Delivery Area Surcharge is still a surcharge, which means it will be applied to certain services, but not others.  

Each of these surcharges (DAS and EDAS) have a specific fee that is different depending on the service they are applied to. For example, DAS affects many next-day services, 3-day services, express and ground services too. EDAS might affect the same ones, but depending on the carrier, it may not.  

The surcharge isn’t always the same fee as well, the actual cost applied depends on the speed of delivery and area the package is going to. For example, in 2022 same shipment might incur a surcharge of $3.55 for UPS Air Commercial, or a surcharge of $32.50 for Extended Residential, FedEx Home Delivery. Fees are almost always listed per shipment, and some charges have a maximum charge based on weight or volume.  

These surcharges are also subject to change or increase at any time. Carriers don’t often publish these changes very widely, so you’ll need to work closely with your carrier representative and ask hard questions about the state of these surcharges. 

Here is a full list of the UPS 2022 rates and surcharges 

Here is a full list of the FedEx 2022 rates and surcharges 

How a 3PL Can Help Lower Your Shipping Fees 

Transportation costs can make up the bulk of an ecommerce company’s budget—sometimes accounting for up to 70% of your overall budget. It’s so important to work with a 3PL who understands the industry and can help analyze your shipping data to choose the best carrier and service for your brand.  

If you think you’re overpaying for shipping fees, you need to talk to an expert about it. An experienced 3PL will be able to rate-shop, meaning they will assess what you ship and look across the entire industry of carrier services to find the one that’s right for your product. They will take cost into consideration, as well as shipping speed, and the types of parcels you ship (weight, size, etc).  

Often 3PLs have really close relationships with many carriers. They might be able to get you shipping discounts because they are a high-volume shipper. If there are changes to your service or surcharge cost, they may also be helpful in letting you know in advance of getting a bigger bill.  

 

 

If you are looking for a fulfillment provider to help you navigate your freight and shipping fees, reach out to DCL Logistics for a quote. We provide extensive services ecommerce companies looking to grow and scale.