Scenario: Carrier service and zone component surcharges

Carrier service surcharges are calculated across all routes where a carrier service delivers. They compensate the carrier service provider for extra costs, such as fuel or environmental that they might incur. Zone component surcharges are applied to specific routes when a package is delivered to a destination. For example, an extra fuel surcharge might be applied. You can update the sequence in which the surcharges are applied for carrier service and zone component surcharges.

By default, the Percentage or Fixed type of surcharge is calculated on the base rate which corresponds to the default value of 1 for the chargeTier attribute. The amount that results serves as the base for the next tier. Specifically, surcharges that contain a chargeTier value of 2 are applied to the amount produced after the surcharges from chargeTier 1 are applied.

Calculate the shipping rate using two tiers of surcharges as follows:

To calculate the tier 1 subtotal, apply the tier 1 surcharges to the base rate.
To calculate the final rate that includes surcharges from both tiers, apply the tier 2 surcharges to the tier 1 subtotal.

Updating the sequence of surcharges

By default, the Percentage or Fixed type surcharge is calculated on the base rate. In the following scenario, a base rate of 5 USD is applied to the two types of surcharges:

Fuel: Fixed; 2 USD
Environmental: Percentage; 10%

The Environmental surcharge is a percentage that is calculated on the base rate. As a result, the following rate calculations apply:

(5 + 2) = 7 USD (tier 1)
(5 + 2) = 7 (tier 1) + (5 * 10)/100) = 7.5 USD (tier 2)

Next, to calculate the surcharge on either the base rate or the subtotal rate, you can apply the chargeTier attribute in the Set or update carrier service surcharge configuration API.

In the following scenario, the chargeTier values are applied for UPS Ground across the various types of surcharges.

The subtotal includes the base rate and the surcharges, which is calculated as base Rate + surcharges.

The chargeTier attribute can be set to 1 or 2.

When chargeTier is set to 1, surcharges are calculated by default on only the base rate.
When chargeTier is set to 2, surcharges are calculated on the subtotal of the base rate plus the chargeTier 1 surcharges.

In the following scenario, the chargeTier values are applied for UPS Ground to the various types of surcharges:

Fuel: Fixed; 2 USD, chargeTier = 1
Environmental: Percentage; 10 %, chargeTier = 2

As a result, the following rate now applies:

5 + 2 = 7 + ((7 * 10)/100) = 7.7 USD