Surcharge Calculation - Carrier Rate Shopping

Owned by Rahul Kumar Sahukar
May 25, 2023
3 min read

Fenix’s Carrier Rate Shopping engine can pull in rates in two ways for it to do the rate shop.

  1. Carrier API

The advantage of this approach is, the API will provide the complete shipping cost break up that includes all the surcharges and taxes. This is a considerable chunk of the final shipping cost. For vendors who have negotiated rates with the carriers, the API based approach will also provide the discounted shipping cost.

2. Carrier Rate Card

In this approach, the carrier provides the rate card that the vendor uses to determine the shipping cost. However, the rate card rates are based on base rates. For every pound/zone, a base rate is provided in the rate card which the vendor needs to use to know the shipping cost.

The disadvantage obviously is that the rate card rates do not contain the surcharges the carrier may eventually add up in the final invoice.

 

Fenix Surcharge Calculation Engine

Most Rate Shopping engines can’t reliably use the rate cards as they present a very deceived picture of the final label cost. To handle this in a more realistic manner, Fenix developed a Surcharge Engine module which helps is padding up that extra dollar amount to the base rates from the rate card to present a more realistic ship cost.

How it works?

Fenix surcharges can be applied in two different ways.

  1. Configure Surcharge for each service or at a carrier level

  2. Add a flat amount or a percent on top of the rate card rate

 

Configure Surcharge for each service or at a carrier level

In this model, the vendor can define multiple levels of surcharges that can be applied either at the base charge level or on top of another surcharge. The amount can be applied as a percentage value or a flat amount.

The surcharges can also be applied based on the weight of the shipment or the amount of distance it travels. To give an example, FedEx Ground Surcharges can be configured as follows.

 

Add a flat amount or a percent on top of the rate card rate

With this approach, the vendors can apply a flat x% or $x on the shipping option charges. This is easily be configured on Fenix business console.

 

Summary

Fenix’s Rate Shopping Engine is a powerful tool to automate your shipping process by delegating the process of comparing the shipping rates from multiple carriers and always get the best service to ship which is optimal both in terms of the shipping cost and the transit time.