UPS charges a fee at customs to broker duty and tax payment. This article explains the brokerage fee and how you could bypass them.
What is a UPS Brokerage Fee?
A UPS brokerage fee is charged by UPS for handling the customs clearance of international shipments. This fee covers tasks such as:
- Preparing and submitting customs entries
- Calculating duties and taxes
- Facilitating the release of goods by customs authorities
UPS brokerage fees vary based on service type and destination country. These fees depend on the complexity of the customs process and specific requirements for different goods. If you ship using DDP (Delivered Duty Paid), you are responsible for paying customs and brokerage fees, ensuring the receiver won't need to pay anything.
Which Services are Subject to Brokerage Fees?
All international shipments are subject to brokerage fees. However, some services include "routine customs clearance fees" (Entry Preparation Charges) in the shipping fee. These services include:
- UPS Worldwide Express Plus®
- UPS Worldwide Express®
- UPS Worldwide Saver®
- UPS Worldwide Expedited®
- UPS® Standard to Mexico
For UPS® Standard to Canada, the routine customs clearance fee applies only if the item value for duty is above $800.
Additional fees may still apply for services such as:
- Formal entry clearance
- Live entry clearance
- Temporary import bonds
- Duty drawbacks
Other potential fees can arise from:
- Database management
- Customer-specific classification directives
- Special operating plans
- Assigned rating teams
- Custom reporting
Ways to Bypass UPS Brokerage Fees
To bypass UPS brokerage fees, consider these options:
- Flat Export: A reliable and affordable international shipping service that consolidates multiple solutions into one discounted rate, allowing you to use your own packaging with specific size and weight limits.
- USPS International Service: Using postal services like USPS International generally includes customs clearance within the postage cost, avoiding separate brokerage fees.
- DHL Express: Though it has a Duty Tax Paid surcharge similar to a brokerage fee, DHL Express typically offers a lower rate than UPS brokerage fees, making it a cost-effective alternative for international shipping.
What Happens if you Don't Pay?
If you don't pay the brokerage fees to UPS, your shipment will not clear customs, leading to significant delivery delays. UPS may hold the package until the fees are paid. If the fees remain unpaid for an extended period, the shipment could be returned to the sender or even abandoned. This can incur additional costs such as storage fees, return shipping charges, or disposal fees. Moreover, it can negatively impact your reputation with customers due to the delay or failure to deliver the goods.
What is a Custom Broker and Why Do we Need Them?
A customs broker is a licensed professional or company that helps importers and exporters clear goods through customs. They ensure compliance with laws, prepare and file documents, and facilitate clearance through agencies. They are essential for navigating complex international shipping regulations, avoiding delays and penalties, and managing risks and costs effectively.