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Worried about the New $100 USPS Surcharge?

Worried about the New $100 USPS Surcharge?

No one likes surprises. Here’s what online sellers should know about the new $100 USPS surcharge.

When the USPS announced new rates for Shipping services last month that take effect on January 24th, it introduced the following brand-new $100 fee for oversized packages:

“For Priority Mail Express, Priority Mail, Parcel Select, Parcel Return Service, USPS Retail Ground, and First-Class Package Service customers, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).”

A $100 surprise is not the kind of fee small merchants can easily absorb. We turned to shipping consultant Raf Zimberoff to learn how it might impact online sellers. He said he was not surprised that the USPS is instituting the surcharge.

All carriers have rules for max size/max weight, he said. Big mailpieces need special handling and can’t be handled by any of the normal equipment, and are labor intensive to deal with. The maximum-size rule has been on the books forever without the fee, so now USPS is going to put some teeth into it.

But there’s more to the issue – the USPS has an induction puzzle, Zimberoff said, explaining that induction is when you insert packages into the mail stream.

“FedEx and UPS basically have a gatekeeper induction system. To get a package into those streams, you have to hand it to a FedEx or UPS employee or representative (via daily pickup, via a UPS store or FedEx authorized service counter, etc). So they gate keep on the front end.

“FedEx and UPS also have a power that USPS has typically not had: They can charge you after the fact for breaking a rule (for example, under-reporting a package size or weight). They can do this because almost all packages are shipped on a carrier shipping account.”

But the Postal Service has historically been unable to enforce rules past the induction stage, with only a couple of tools available to it:

  • Return the package due to insufficient postage or breaking a size rule;
  • Deliver the package postage due. (Everyone really hates this, Zimberoff said.)

However, over the past 2 – 3 years, USPS started charging shippers for underreported weight and dims after getting the infrastructure in place to weigh and measure all the packages going through the system, known as Automatic Package Verification (APV).

“So now if you under report weight or dims, USPS will catch it, and charge you, a week or more after the actual shipment, just like FedEx and UPS have been doing for many years,” Zimberoff explained. “Now that USPS is covering the basics (dimensions and weight), they can start to enforce other rules, max size being one.”

UPS and FedEx also have max sizes, he said – UPS has a max 165 inch length+girth, with a fee of $875 for going over the max.

“Maximums are normal – the truck is only so big,” he said.

A big difference is that if you OVER report weight or dims, USPS will credit the postage back to you. “No one else does this that I know of – FedEx and UPS for sure do not do this.”

It’s hard to visualize what types of packages this impacts. “Long items are the bugger, Zimberoff said. “Think parts of a couch, or the exhaust system for a car. Building materials.”

Will the new surcharge impact many online sellers? “No, he said. “I have never met a seller this would impact. (But I am sure one is out there!)”

What should a seller do if they have a package exceeding the maximum mailable size?

“Use a specialized freight service,” Zimberoff advised, “As these items probably won’t go on a regular pallet!”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

One thought on “Worried about the New $100 USPS Surcharge?”

  1. Will this impact sellers? Absolutely! The author might not know of one, but we do!
    Years ago we used to ship a lot of large items (think bikes and wheels), and a lot of international shipping as well. FedEx\UPS charged dim weight, USPS did not (including international). So a wheelset might cost us $50 to ship express international, while UPS would be $400. Problem was, the size restriction was 108ci for many destinations, while the wheel boxes were about 118ci. Our carrier would take these packages and the size restriction was not enforced, whereas a counter would decline them. So I understand exactly what the author is referencing. Bikes routinely are larger than 130ci, so the same applies there.
    While this is no longer an issue for us – too many ripoffs to continue these kinds of shipments today! – for others, this is a problem. But, some sort of enforcement is overdue.

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