A guide to FedEx and UPS Late Payment Fees and Past Due Charges

Both FedEx and UPS now strictly enforce a 9.9% late fee on any invoices paid beyond their due date. This means any time you forget to pay or are late paying an invoice to FedEx and UPS, you have a 10% increase on your entire parcel shipping bill without providing any additional value. There is no improvement in service or transit time. It is simply a penalty for missing a deadline.

The Shrinking Payment Window

Before 2021, most shippers operated with payment terms of around 30 days. Today, that window has been reduced to just 14 or 15 days, placing increased pressure on accounts payable teams to process invoices quickly.

In the past, FedEx rarely enforced late fees, and while UPS had policies in place, enforcement was inconsistent. That environment has changed. Both carriers now apply these penalties consistently, and the rate has increased from approximately 6% to 9.9%.

Additional Processing Fees

There are also several additional fees on top of the late fee that UPS and FedEx may charge you:

• Non-ACH payments- A 2% fee for payments made via credit card or outside the carrier’s ACH system for FedEx and UPS invoices.
• Manual payment fees- A $25 charge for payments made by check or wire transfer for FedEx or UPS invoices.
• Paper invoice fees- A $5 charge for receiving printed invoices for FedEx or UPS invoices. 

The Real Cost of Non-Compliance

Consistently paying invoices late leads to a direct and ongoing loss of capital. The 9.9% penalty could be allocated toward hiring, equipment, or business growth initiatives.

There are also operational consequences. If an account becomes significantly overdue, carriers may place it on hold or shift it to Cash on Delivery (COD). This can disrupt pickups and deliveries, ultimately affecting revenue and customer satisfaction.

Five Action Steps to Avoid These Late Payment Fees from FedEx or UPS

To protect your bottom line, you must optimize how your business receives and pays shipping invoices. Implement these steps immediately:

To minimize unnecessary costs, businesses should optimize their invoicing and payment processes:

1. Transition to paperless billing to eliminate paper invoice fees.
2. Avoid check payments, as mailing delays increase the risk of late fees.
3. Implement ACH payments to ensure faster processing and avoid additional surcharges.
4. Streamline internal approval workflows to ensure invoices are processed within 10 days.
5. Consider a freight audit and payment partner to automate invoice review and ensure on-time payments.

By improving internal processes and adopting more efficient payment methods, companies can reduce avoidable fees and better protect their margins.