How UPS Shipping Costs Are Calculated

Most online shoppers are probably unaware of how shipping costs are calculated, and as customers of Christmas Lights Creations you may be curious why our UPS shipping rates sometimes appear to be high.

As a small business we actually enjoy good shipping rates and we work to pass those along to our customers. All of our shipping rates are based on UPS Ground, and those rates are calculated using a series of individual costs that are added during the checkout process. When you place a product in the shopping cart and enter your address, the UPS plugin we have in use on the website “calls” the API, or Application Programming Interface, which communicates with UPS based on our contract terms.

In a matter of seconds the shipping costs are calculated based on the dimensions and weight of the product, and the destination zip code. We don’t want to get overly technical with our description of the calculation process, but the size and weight of the box are always rounded up. In other words, if the box is 16.5 inches it is billed as a 17 inch box, and if the box weighs 2.3 pounds it is billed as a 3 pound box.

Other factors play a role in how the shipping costs are calculated. UPS charges us a Base Ground Rate, Fuel Surcharge and a Residential Surcharge, if applicable, for every box we ship. They could also charge us additional fees depending on where you reside, including a Delivery Area Surcharge, an Extended Delivery Area Surcharge and during the months of November and December, a Peak Season Surcharge.

We’re willing to bet most of you didn’t know all of those charges went into the calculation process. In 2019 UPS raised our Base Ground Rate $0.28 per box, the Residential Surcharge increased $0.17, the Delivery Area Surcharge rose $0.60, and the Extended Delivery Area Surcharge increased $0.20. Factoring in Fuel Surcharge, on average every box we ship in 2019 costs us an additional $1.00 which is passed along to our customers. Since moving from FedEx to UPS in 2016, we have paid on average an additional $1.00 every year for every box we ship. In 2018 we paid a Peak Season Surcharge of $0.28 per box and in 2019 we expect that amount to increase to $0.39 per box.

For those of you that reside in urban areas your shipping costs will be the lowest. However, for our customers that reside in locations that UPS considers outside the urban delivery areas you will pay more to have your order shipped. Unless you purchase products equaling $109 or more which entitles you to free shipping, you can expect to see shipping costs generally anywhere between $10.80 and $12.80 for smaller boxes. For larger boxes, like the Grand Venture Snowman, you can expect to see shipping costs between $18 and $30 depending on where you reside.

Shipping costs are a part of e-Commerce that no business can escape. And while we offer “free” shipping on some of the products in our online store, there is no such thing as free shipping. No business in the United States can literally ship your order for free, not Walmart, not Amazon, no one. Every company, including Christmas Lights Creations, must pass along shipping costs to our customers. This is a fact and anyone telling you otherwise is lying.

We’re confident this will help everyone shopping on our website to have a better understanding how shipping costs are calculated.

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