Monday, July 31, 2017

Shipping companies' extra delivery charges for rural areas pinch small-business owners

Most small businesses in rural areas already operate on tight margins, but one factor might be making things harder: the surcharges for mail delivery to remote areas. The "delivery-area surcharge" is a long-time practice of both UPS and FedEx, but some small business owners say it's putting a big dent in their finances. Sarah Sell reports for WZZM-TV in Fremont, Mich.: "Chad Korytkowski, owner of Tru Fit Birkenstock, gets multiple deliveries a week from footwear companies. Each time, there is an extra, 'rural delivery' charge and Korytkowski says it adds up quickly, leaving him to pay $500 to $1,000 on busy months." Korytkowski told her, "As a small business, mom and pop, brick and mortar business, dollars count. And shipping is a big part of that expense."

Sperling's Best Places map
Adding to the confusion, WZZM discovered that the ZIP codes considered "rural" by FedEx were hit-or-miss. Fremont is listed, but several smaller surrounding communities are not. The 2017 list of ZIP codes that are assessed a delivery-area surcharge are listed here for FedEx and here for UPS.

Delivery-area surcharges are just one way mail carriers are trying to make rural delivery cost-efficient. UPS began testing drone deliveries in February, saying that reducing the driving distance by one mile per driver per day could save the company up to $50 million. Drone delivery is still probably years away from implementation. The U.S. Postal Service is also exploring ways to make its rural routes more helpful, such as providing basic financial services. That could be helpful since more than 60 percent of USPS branches are in ZIP codes where there are either one or no bank branches.

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