What is a carrier package minimum and are my packages affected by this?
Many shippers lack sufficient understanding of how the carrier package minimum charge from FedEx and UPS affects their overall shipping expenditure. It's important to note that many companies don't realize that those carrier package minimums can actually override a good chunk of the discount rates they negotiated. So, it's crucial for shippers to familiarize themselves with the contractual UPS minimum net or FedEx minimum package charge.
What's the 2023 minimum net charge?
Carrier package minimums set a minimum net charge for every package shipped. It's the absolute minimum amount you'll have to pay to send any package. When it comes to each shipment, you'll be charged the higher amount between (a) the net shipment charge based on your negotiated incentives or (b) the minimum net shipment charge. By default, the minimum net charge is typically set for a one-pound package in Zone 2. For both UPS and FedEx, the 2023 minimum net charge is $10.10 and it will continue to go up year over year.
Can I lower my minimum net charge?
Don't be fooled by your carrier rep if they claim that package minimums are non-negotiable. Minimums are as negotiable as any other part of of your carrier agreement! The key questions to consider are: how many of your shipments are subject to the minimum net charge, and what reduction is needed to maximize your negotiated discounts?
At ShipScience we specialize in identifying shipments that are impacted by these minimum net charges. Our team of contract consultants is dedicated to reducing your shipping costs by unraveling the complexities of carrier agreements and finding solutions that work best for your company. We're always eager to assist shippers, so feel free to reach out to us anytime. We're here to help!