Shipping & Logistics Glossary

The measured physical weight of a package on a scale, expressed in pounds or kilograms. Carriers bill the greater of actual weight or dimensional (DIM) weight. When a package is large but light, DIM weight often exceeds actual weight, resulting in a higher billable charge.

A per-package fee charged by UPS and FedEx when a shipment requires manual handling beyond what automated conveyor systems can process. Triggers include packages with a longest side exceeding 48 inches, second-longest side over 30 inches, weight over 50–70 lbs depending on service, or irregular shapes not in corrugated boxes. AHS typically runs $16–$22 per package and is negotiable for high-volume shippers. See also: Additional Handling in the Surcharge Index.

A charge assessed when a carrier corrects an incomplete or inaccurate delivery address after a package is tendered. The carrier updates the address in their system (adding a missing apartment number, correcting a ZIP code) and adds a fee — typically $18–$20.50 — to the shipper's invoice as a post-shipment adjustment. Address corrections can often be avoided with address validation software at the point of order entry.

A delivery option requiring the recipient to be at least 21 years old and present a government-issued ID at time of delivery. Required by law for alcohol, certain pharmaceuticals, and some firearms accessories. ASR carries a higher surcharge than standard signature required — typically $9–$11 per package — because it increases delivery complexity and failure rates.

A contractual agreement in which a shipper promises to tender a minimum total shipping spend or package count to a carrier within a 12-month period. In exchange, the carrier offers enhanced discount tiers, surcharge reductions, or other incentives. Falling below the commitment threshold may trigger penalty clauses or discount reductions. Negotiating realistic commitments — not ones that require volume you don't have — is critical.

Any charge beyond the base transportation rate. This umbrella term covers all surcharges: fuel, residential, additional handling, address correction, peak, extended delivery area, and more. Understanding your accessorial spend as a percentage of total shipping costs is one of the most important metrics in carrier cost management.

The foundational transportation charge for a shipment, calculated using the carrier's published rate tables based on package weight (actual or DIM), destination zone, and service level (ground, 2-day, overnight, etc.). The base rate does not include surcharges, fuel charges, or accessorial fees. Negotiated discounts are applied to the base rate, though some surcharges reference the base rate to calculate their own amount (e.g., fuel surcharge as a % of transportation charge).

The weight used to calculate your shipping charge — the greater of actual weight or dimensional weight. For a 5-lb package in a large box with a DIM weight of 18 lbs, your billable weight is 18 lbs. This distinction is critical for businesses shipping light products in large packaging.

The formal contract between a shipper and a carrier (UPS, FedEx, etc.) that governs pricing, service levels, discount structures, minimum charges, and terms of service. Carrier agreements are typically renegotiated annually and contain both published and unpublished (negotiated) elements. Most businesses are on some form of carrier agreement, even if they've never formally negotiated one.

Adherence to a carrier's rules regarding packaging standards, label requirements, manifest procedures, prohibited items, and weight/size limits. Non-compliance can result in surcharges, shipment delays, or refusal of packages. Maintaining carrier compliance is a baseline requirement for consistent service and predictable billing.

In a logistics/carrier context, a chargeback occurs when a carrier retroactively adjusts a shipment's charges after delivery — typically because a package was reweighed and found to be heavier than declared, or because a surcharge was missed at time of label generation. Chargebacks appear as adjustment line items on subsequent invoices and can significantly impact cost-per-shipment calculations.

A document required for international shipments that describes the contents, quantity, value, and country of origin of goods being shipped. Customs authorities in the destination country use the commercial invoice to assess duties and taxes. Incomplete or inaccurate commercial invoices are a leading cause of international shipment delays and customs holds.

The shipper-stated monetary value of a package's contents, used to determine carrier liability in case of loss or damage. Carriers provide baseline liability coverage (typically $100 for UPS/FedEx) at no charge; additional declared value can be added for a fee. Note: declared value is not the same as insurance — carriers may dispute or limit payment even with declared value.

See Extended Delivery Area Surcharge (EDA). Some carriers and contexts use DAS and EDA interchangeably, though carriers may also distinguish between standard DAS (moderate rural areas) and extended DAS (highly remote locations). Check the specific carrier's published rate tables for exact definitions and ZIP code lists.

A calculated weight based on a package's volume, designed to ensure carriers are compensated when a lightweight package occupies significant trailer or aircraft space. Formula: (Length × Width × Height in inches) ÷ DIM Factor. Both UPS and FedEx use a DIM Factor of 139 for domestic shipments and 166 for international. The higher of actual weight and DIM weight is the billable weight. See our full guide: What Is Dimensional Weight?

The divisor used in the DIM weight formula. A higher DIM factor results in a lower calculated DIM weight, which is favorable for shippers. The standard domestic DIM factor for UPS and FedEx is 139. Some large-volume shippers negotiate a higher DIM factor (166, 194) in their carrier contracts, effectively reducing their DIM weight charges on every qualifying package.

A surcharge applied to deliveries in rural, remote, or geographically challenging ZIP codes as defined by the carrier. Both UPS and FedEx maintain published EDA ZIP lists that are updated annually. Costs range from $4 to $21+ per package depending on the carrier, service level, and EDA tier. Businesses with rural customer bases should analyze their EDA exposure and consider USPS or regional carrier alternatives for EDA-heavy routes. See: EDA in the Surcharge Index.

A variable percentage fee added to the base transportation rate to account for fuel cost fluctuations. UPS and FedEx calculate weekly fuel surcharges by referencing the U.S. Energy Information Administration (EIA) national average diesel price. Ground and air fuel surcharges are set separately. Fuel surcharges are applied as a percentage of the transportation charge — if your fuel surcharge is 12% and your base rate is $10, you pay $1.20 in fuel charges. Negotiating a fuel surcharge cap or fixed rate is one of the highest-impact contract terms for shippers.

Goods transported in bulk, typically via truck (LTL or truckload), rail, ocean, or air freight, as distinct from parcel shipping. Freight shipments are generally larger and heavier than parcel — typically over 150 lbs — and are priced per hundred pounds (hundredweight) rather than per package. Parcel and freight networks are distinct; some businesses use both depending on shipment size.

An annual across-the-board price increase implemented by UPS and FedEx, typically announced in Q4 and effective January 1. GRIs typically run 5.9–6.9% on published (list) rates. Negotiated discounts are usually applied as a percentage of these list rates — meaning if your discount is 40% off list, a 6.9% GRI effectively raises your net rate by about 6.9% as well. GRI impact is a key reason to renegotiate contracts every 1–2 years.

Surface transportation via truck, the most cost-effective carrier service for non-time-sensitive parcel shipping. UPS Ground and FedEx Ground deliver within 1–5 business days depending on origin and destination zone. Ground shipping rates are lower than express but carry longer transit times. Ground networks have expanded significantly in recent years, with Saturday delivery becoming increasingly available.

A freight pricing unit equal to 100 pounds. LTL (less-than-truckload) freight and some parcel services price shipments per hundredweight rather than per package. Hundredweight pricing can offer significant discounts for shipments above certain weight thresholds, making it an alternative to standard per-package pricing for dense, heavy shipments sent to the same destination.

A charge or credit added to a carrier invoice after the original shipment was processed — typically because the carrier discovered a weight discrepancy, address correction, or unreported surcharge during or after delivery. Adjustments often appear weeks after shipment and can be difficult to reconcile. Regular invoice auditing is essential to catch incorrect or duplicate adjustments.

The final leg of a shipment's journey — from a distribution hub or carrier facility to the end consumer's address. Last-mile delivery is the most expensive and labor-intensive segment of parcel logistics, accounting for up to 50% of total shipping costs. Carriers, 3PLs, and startups continually invest in last-mile efficiency through route optimization, local delivery partners, and locker/PUDO (pick-up/drop-off) networks.

The published, undiscounted rate from a carrier's standard tariff. List rates are what a shipper pays without a negotiated agreement — essentially the highest possible price. All negotiated discounts are calculated as a percentage off the list rate. Carrier list rates increase with each General Rate Increase, which is why negotiated discounts must keep pace to maintain real savings.

A freight shipping mode where a shipper's goods occupy only part of a truck trailer, sharing space with other shippers' freight. LTL is used for shipments too large for parcel networks (typically 150–10,000 lbs) but not large enough to fill a full trailer. LTL pricing is based on weight, freight class, distance, and accessorial charges — a distinct pricing model from parcel shipping.

A discounted rate that applies only to shipments that are electronically manifested before pickup — meaning the carrier receives shipment data via EDI or shipping software prior to the driver's arrival. Non-manifested shipments (those where label data isn't transmitted electronically) may be charged at higher rates. Most modern shipping systems manifest automatically; this term is more relevant for shippers using older workflows.

A document or electronic file listing all packages in a shipment batch, including tracking numbers, weights, destinations, and service levels. Submitting a manifest before carrier pickup enables rate discounts and ensures accurate billing. In large warehouse operations, end-of-day manifest procedures are a key operational step before carrier pickup windows.

The lowest amount a carrier will bill for any single package, regardless of how light or inexpensive the base rate would otherwise be. Minimum charges protect carriers from the economics of processing and delivering extremely cheap packages. For businesses shipping many lightweight, low-value items, minimum charges can dramatically raise effective per-package costs.

The floor price in a negotiated carrier contract — the lowest net amount a shipper will pay after all discounts are applied. Even if discount calculations would produce a charge below this floor, the minimum net charge applies. Negotiating a low minimum net charge is important for businesses shipping lightweight or short-zone packages.

The actual rate a shipper pays after their negotiated discounts are applied to the carrier's list rate. Net rate = List Rate × (1 – Discount%). The net rate does not include surcharges, which are added separately. Understanding your effective net rate across all service types and zones is essential for accurate shipping cost modeling.

A scheduled pickup requested by a shipper outside of their regular daily pickup schedule. On-call pickups may incur an additional fee and are subject to carrier availability. High-volume shippers typically establish daily scheduled pickups, making on-call pickups unnecessary. For low-volume shippers, dropping off packages at a carrier location may be more cost-effective than on-call pickup fees.

A high-tier surcharge applied to packages that exceed the carrier's maximum size or weight thresholds for standard parcel processing — typically when length exceeds 108 inches or weight exceeds 150 lbs. These packages may be refused by the carrier or assessed a penalty charge of $110–$145+. At these dimensions, freight shipping is usually more economical.

A single package shipped through a carrier's parcel network (UPS, FedEx, USPS). Parcel shipments are typically under 150 lbs and move through automated sortation facilities. As distinct from freight (LTL/truckload), parcel shipping is optimized for individual packages moving from shipper to end consumer.

A temporary additional per-package fee that carriers impose during periods of high shipping volume — primarily the holiday season (October–January) but also extended through other demand spikes. Peak surcharges were significantly expanded during COVID-19 and have remained higher than pre-pandemic levels. Rates vary by service level, package type, and shipper volume tier. See: Peak Surcharge in the Surcharge Index.

Each time a carrier driver visits a delivery address but is unable to complete delivery — typically because no one is home and a signature is required, or access to the building is restricted. Carriers typically allow two or three attempts before returning the package to the shipper. Multiple pickup attempts generate additional costs (though they're often bundled, not explicitly billed) and negative customer experience.

Documentation confirming a package was successfully delivered, including the delivery timestamp, location, and in signature-required cases, the recipient's name or signature. PODs are critical for disputes, insurance claims, and customer service inquiries. Most carriers provide electronic POD through their tracking systems; physical POD may be requested for an additional fee.

A per-package fee for deliveries to addresses classified as residential in the carrier's database. Residential deliveries are more expensive for carriers because they're less route-efficient than commercial stops. The surcharge typically runs $5.55–$8.25 per package and is one of the most significant cost drivers for e-commerce shippers. Home-based businesses are often incorrectly classified as residential. See: Residential Surcharge in the Surcharge Index.

The average revenue a carrier earns per package, including base rate, surcharges, and accessorials. Carriers analyze RPS by customer to evaluate profitability. Understanding your own RPS data — from the carrier's perspective — helps you negotiate from an informed position, knowing whether you represent an attractive or unattractive shipping profile for the carrier.

A charge applied when a carrier's automated scale or dimensioning equipment detects a discrepancy between the declared weight on a label and the package's actual measured weight. If the measured weight is higher, the shipper is billed for the corrected weight plus a reweigh fee. Accurate pre-shipment weighing and labeling eliminates most reweigh fees.

A delivery option requiring a recipient's signature to complete delivery. Standard signature required allows any adult at the delivery address to sign; Adult Signature Required (ASR) mandates the recipient be 21+ with valid ID. Both add a per-package surcharge and increase delivery failure rates, since someone must be present. See: Signature Surcharge in the Surcharge Index.

Hybrid shipping services from FedEx (SmartPost) and UPS (SurePost) that use the carrier's network for the bulk of transit, then hand off to USPS for final-mile delivery. These services are typically the cheapest per-package option for residential deliveries of lightweight items, but transit times are 1–2 days longer than standard ground. They have no residential delivery surcharge (since USPS handles last mile), making them attractive for high-residential-volume e-commerce shippers.

See Carrier Agreement. The formal contract governing shipping rates and terms between a shipper and carrier. Service agreements typically cover discount schedules, minimum charges, incentive tiers, surcharge treatments, and volume commitments. Most are renewed annually, though multi-year agreements are possible — and sometimes advantageous if structured correctly.

The carrier's published rate schedule, including base rates, surcharges, service terms, and rules governing all shipments. The tariff is the carrier's "list price" — the starting point before any negotiated discounts are applied. Carriers file tariffs publicly but negotiate private addendums with volume shippers that modify the published tariff rates.

The number of business days between package pickup and delivery, based on the service selected and the origin-destination zone pairing. Ground transit times are typically 1–5 business days; express services range from next-day to 3-day. Transit time is a key factor in service selection and customer satisfaction — choosing the appropriate service level avoids paying for speed you don't need.

A geographic distance classification used by UPS and FedEx to price shipments. Zones are numbered 2–8 (in the domestic US), where Zone 2 is the closest to the shipper's origin and Zone 8 is the farthest. Higher zones cost more because packages travel greater distances. Zone is determined by the origin ZIP code and destination ZIP code, using carrier-published zone charts. Managing zone distribution — shipping from facilities closer to customers — is a key cost reduction strategy.

The pricing model used by UPS and FedEx where base transportation rates increase with zone distance. Zone-based pricing means the same package can cost dramatically different amounts depending on where it's shipped. Businesses with national customer bases often benefit from distributed fulfillment (multiple warehouse locations) to reduce average zone distance and costs.

A shipping strategy where a shipper consolidates packages destined for a geographic region and moves them in bulk (as a freight shipment) to a regional distribution point, then injects them into the carrier's network at a nearby facility. This reduces the zone distance charged for last-mile delivery, lowering per-package costs. Zone skipping is most practical for shippers with significant daily volume to specific regions.

A company that provides outsourced logistics services — warehousing, fulfillment, transportation management, and sometimes carrier negotiation — to other businesses. Using a 3PL allows companies to scale fulfillment without owning warehouse space. Some 3PLs negotiate carrier contracts on behalf of multiple clients, providing access to volume-based discounts that individual clients couldn't achieve alone. When evaluating a 3PL, always ask about their carrier rates and whether you'd benefit from their volume pricing.