Since early 2021, FedEx and UPS have stepped up enforcement of late payment penalties, and if you’re not paying close attention to your invoices, these fees could be silently eroding your profits.
As of the latest updates, both carriers have set their late payment fee at 9.9% of the total past-due invoice amount. That’s nearly 10% added to your costs – just for being late.
Key Points:
- Previously, FedEx and UPS offered 30-day payment terms.
- UPS and FedEx both have reduced payment terms to around 15 days or less.
- Both carriers currently charge a 9.9% late payment fee, nearly 10%.
- UPS invoices are issued on Saturdays, and weekends count towards payment terms.
- Day one is Sunday, so you may have less time than expected to pay.
- FedEx invoices can be issued on any day, so the actual number of business days to pay varies.
Another highly significant shift went into effect on May 18, 2025:
- The good news for shippers is that there is no longer a credit card premium for the new payment processing cost. The bad news is that each invoice will have a payment processing fee attached to it, which is equivalent to 2% of the invoice charges.
When Do Late Fees Apply?
Most carrier invoices are due within 14 to 15 days of issuance. If payment isn’t received (with remittance data) by that deadline, the late fee is automatically assessed.
Late fees are assessed on past-due balances according to your billing schedule. If the behavior becomes habitual, UPS may move you to a “cash-only” payment status, requiring all shipments to be prepaid.
Why these Fees Hurt?
At a 9.9% penalty rate, even a $10,000 invoice becomes $10,990 if left unpaid. Multiply that across multiple invoices, and your cost of doing business with FedEx and UPS rises fast, without any additional benefit to your operations.
And for companies on tight margins or operating high-volume shipping operations, these fees can cause significant budget overruns.
How to Avoid Late Payment Fees?
- Monitor your billing cycles closely: Set up alerts or automate reminders for invoice due dates.
- Implement a clear AP process: Ensure your accounts payable team has standardized payment procedures tied to carrier terms.
- Consolidate carrier invoices if possible: Fewer invoices mean fewer opportunities to miss deadlines.
- Work with a parcel expert: Companies like nVision Global can help mitigate these costs and other costs.
One Missed Deadline Can Spiral
Repeated late payments may result in:
- Cash-only status (prepaying all shipments)
- Delayed deliveries due to billing holds
- Damaged relationships with your carriers
How nVision Global Helps?
With our freight audit and payment solutions, we help you:
- Track and validate all parcel and freight invoices.
- Flag upcoming payment deadlines.
- Automate remittance and reconciliation.
- Avoid late fees consistently.
- Talk to a Parcel Expert to lower these costs, along with other costs that are hurting your bottom line.
Don’t let late payments turn into lost profits. Partner with a team that keeps your logistics costs under control and your invoices on track. Talk to a Parcel Expert Today!