Freightways Group, parent company of NZ Couriers, Posthaste, Castle Parcels, Now Couriers, Pass The Parcel and Sub60 have announced earlier this month the new Pricing For Effort scheme, PFE for short, that from the 1st of July parcels being sent to residential addresses will incur an extra residential delivery surcharge of $0.95, many of our blog readers and shippers ask us to explain this surcharge and want to know what are their options going forward.
Let me explain the history of this surcharge, how it is implemented and what options are available to avoid being charged a residential delivery charge.
Let’s have a quick history lesson shall we? When courier services was first invented (yes these were the days before the internet), the courier services are mainly used by businesses to deliver packages to other businesses, in our industry we call this B2B (business to business deliveries), the advantages of B2B deliveries are that:
Then it comes the internet and ecommerce, most ecommerce deliveries are what we called B2C (business to consumer) because it’s mostly consumers buying online from businesses and the businesses shipping directly to the consumers. The courier companies faces a number of challenges with B2C deliveries:
So Freightways is introducing this new Pricing For Effort scheme to recognise the extra effort the drivers takes to deliver to residential addresses, much like the existing Rural Delivery Surcharge.
Freightways Group have spent the last year upgrading their IT system and ring fencing and distinguishing the business and residential area on the map, this is similar to how rural area is currently done, when an address is enter into the Parcelport system, the system can tell you if the address is business, residential or rural.
There is two types of Residential Delivery Surcharge, a charge for verified address ($0.95+GST) and a charge for unverified address ($1.15+GST), Parcelport system uses verified addresses using satelite coordinates, so all Freightways residential deliveries via Parcelport will be charge at the lower rate of $0.95 and not $1.15
There are a number of ways to avoid paying residential delivery charge:
Any questions on residential delivery charge please feel free to get in touch with us at Parcelport