If you’ve ever shipped an international package with the service UPS Standard, you probably felt excited to take advantage of cheap rates and fast delivery to our northern and southern neighbors (Canada and Mexico, of course). However, depending on the value of your shipment, you or your recipient also probably had to pay some hefty UPS brokerage fees…which is one of the rudest awakenings we at Shipping School have ever experienced when it comes to international shipping. This guide explains the purpose of those fees, and how you can avoid them in the future.
UPS Brokerage Fees Apply to Standard Shipments Traveling to Canada and Mexico
Though UPS doesn’t advertise them whenever individuals or businesses purchase labels, brokerage fees are a type of customs tax that UPS applies to certain international shipments. UPS brokerage fees only apply to UPS Standard shipments, since UPS delivers these packages to Canada and Mexico via ground transportation, and manually clears them through Mexico and Canada’s customs departments.
While UPS has published brokerage fees for Canadian shipments, the company hasn’t published brokerage fees for shipments going to Mexico. So, the following information only applies to UPS Standard shipments traveling to Canada:
If your shipment is valued below 40 Canadian dollars (CAD), you won’t need to pay any brokerage fees. However, you’ll be subject to these fees for any value higher than 40 CAD. The higher the value of the shipment, the more you or your recipient will have to pay in broker fees.
To learn more about these fees and see the different tiers, check out the UPS Rates for Customs Clearance page.
These Fees Still Apply to Labels Purchased with Shipping Software
Think brokerage fees only apply to labels you buy at the UPS Store? Think again! Unfortunately, you aren’t exempt from UPS brokerage fees even if you use shipping software to buy labels online.
Buying labels online through shipping software gives individuals and businesses a lot of perks, including accessing deep discounts through the UPS Digital Access program. However, while you may pay less for your UPS Standard labels themselves, you’ll still need to pay brokerage fees.
Some Strategies to Avoid these Fees
No one likes having to pay crazy customs fees once a package gets delivered…especially when you may not have known you would have to in the first place! Here are a couple of ways you can avoid UPS brokerage fees:
Use a Different International UPS Service
First thing’s first: the easiest way to avoid these fees is to simply opt for another UPS service! UPS Standard isn’t the only international service UPS offers; there’s also Worldwide Expedited, Worldwide Express, and Worldwide Express Plus…and all of these other services offer free customs clearance charges. That means your recipient won’t need to pay any brokerage fees when you use those services*.
*Note: Although these international UPS services offer free customs clearance, “charges may apply for more complex customs clearance procedures,” according to the UPS website.
Use a Different Carrier Altogether
The second option is to ditch the brown logo and choose a different shipping carrier. As far as our experience goes, UPS is the only carrier to impose brokerage fees on shipments traveling to Canada and Mexico after the package is delivered. Other carriers, like USPS and DHL, don’t impose any brokerage fees on their international shipments. Generally speaking, USPS is the most affordable option, offering services such as First Class Package International and Priority Mail International.
If you’re trying to save the most amount of money possible, then you’ll need to do some digging into other niche international services exclusive to certain shipping software companies. One example of a “niche international service” is Simple Export Rate, which is available on Pirate Ship. Simple Export Rate offers the cheapest international rates on the market for packages that weigh 4 pounds or less. On top of saving way more money than you would with UPS, you and your recipients won’t pay brokerage fees!