May 3 2018 0

Understanding declared values for domestic & international shipping

Author: Ariel Maciel, Senior Project Manager, Rush Order

Shipment Value Setup – Domestic and International

Before shipping your product, you will want to determine the value of each item. The main reasons are to specify a value for the carrier (e.g. FedEx or UPS) should any damages or loss occur, as well as for Customs when shipping internationally.

The two key values to specify are Declared Value and Commercial Invoice value.

The Declared Value is the amount we tell the carrier the shipment is worth, and must be assigned to every domestic and international shipment. The value can be listed below the sale price or at a discount from the actual amount the customer paid for the item.

However, the amount specified is the maximum amount the carrier is liable for should damages or loss occur. Unless otherwise specified, the maximum liability for each package is automatically limited to $100 with UPS and FedEx.  A declared value listed above $100 will incur an additional service charge.  The limit with the US Postal Service is $50 for most service levels.

Below are two examples specifying a declared value for a shipment –

1) A shipment with a product value of $50 has a declared value specified at $10. If the item is lost or damaged, FedEx or UPS would cover up to $10 that was specified as the value.

2) If you had an item that was $600, and the value is declared at $100. If the item was lost, then the carrier would cover $100 of the shipment.

If additional insurance coverage is needed, it should be setup before the product is shipped. Additional coverage can be purchased with the carrier. There are also third party companies that offer insurance for shipments and can cover a specified value.

Here are examples of UPS service charges for shipments with declared values over $100:

 

U.S. Express Package Services $0.85 per $100 of value for shipments valued in excess of $100 ($2.55 minimum)
International Express Package Services $0.85 per $100 of value in excess of $100 per $9.07 per lb., whichever is greater
U.S. Ground Services, International Ground Services $0.85 per $100 of value for shipments valued in excess of $100 ($2.55 minimum)
U.S. Express Freight Services $0.85 per $100 of value in excess of $100 or $1 per lb., whichever is greater
International Express Freight Services $0.85 per $100 of value in excess of $100 or $9.07 per lb., whichever is greater

Carriers will also have a maximum declared value restriction. Below are examples from FedEx and UPS.

FedEx

  • The maximum declared value per package for any FedEx Ground, FedEx First Overnight, FedEx Priority Overnight, FedEx Standard Overnight, FedEx 3Day A.M., FedEx 2Day or FedEx Express Saver shipment is $50,000. Exceptions: FedEx Same Day maximum declared value per shipment is $2,000.
  • The maximum declared value per piece (single handling unit) for any FedEx Freight, FedEx First Overnight Freight, Freight 1Day Freight, FedEx 2DFay Freight or FedEx 2Day Freight shipment is $50,000.

UPS

  • The maximum declared value is $50,000, or local currency equivalent, for a package shipped with UPS account number provided.

You should also assess your risk tolerance before purchasing extra coverage.  Consider the quantity you will be shipping and compare against the number of shipments that you expect will be lost or damaged in transit.  In Rush Order’s many years of experience shipping with FedEx and UPS, the ratio of total shipments lost or damaged is extremely low.

A declared value can be setup for each product in the Rush Order Web Dashboard and a default parameter can be set for all shipments.

Options for specifying a default declared value –

  • Auto – all shipments will have a declared value equal to the invoice total, but no more than $100.00.
  • Full – all orders will have a declared value equal to the FULL invoice total (no maximum value, except for the UPS and FedEx maximum values specified above).
  • Max – all orders will have a declared value equal to the invoice total but no more than the MAXIMUM value of your specification.

Separately, a Commercial Invoice (CI) will be needed for each shipment when shipping internationally. This document will include the shipment value for customs of the designated country in order to assign duties and taxes accordingly.

The value on the invoice should be the price the customer paid for the item. If you are providing a sample at no cost or transferring inventory with no sale transaction, a lower value can be assigned. The declared value for a shipment cannot be higher than the Commercial Invoice value, and the value on the Commercial Invoice cannot be zero.

Once the default values are specified with the carrier and your Rush Order project manager, they will be used for all domestic and international shipments. The declared values can be entered directly into the Rush Order Web Dashboard and can be updated if needed. To setup or change your Default Value parameters for all orders, please notify your Project Manager in order to make the adjustments.