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A Shipment to My Daughter

A Complaint Against United Parcel Service (UPS)

Copyright © 1998-2007, 2010, 2017 by David E. Ross

A Shipment Held for Ransom

My daughter Heather, born and raised in southern California, moved to Canada in 1997 and eventually became a permanent resident (landed immigrant) of that nation. As part of the immigration process, Heather gave the Canadian government an inventory of the personal possessions she left behind in California. The Canadian government allowed her to bring those possessions into Canada duty free.

The day after receiving her immigrant's visa, Heather visited us for two weeks. It was the first visit in a year, and we enjoyed every minute. During that visit, she packed two large boxes of her declared possessions. We then went to the nearest United Parcel Service facility to ship the boxes to her Toronto address. Being a loving father, I paid the shipping fees. I asked and was told that the shipment was now fully paid.

When Heather returned to Canada, she was notified by UPS that her boxes had arrived, but UPS would not deliver them until Heather paid a $30US ($43.87Cdn at the exchange rate then) customs brokerage fee. This fee was not paid to the Canadian government for customs because the shipment was duty free. Instead, this fee — not disclosed to us at the time of shipment — was paid to UPS for transporting the boxes across the international boundary. Heather paid the fee because UPS would not otherwise let her have her boxes.

No, the customs brokerage fee was not a tax. It was not customs duties paid to Canada. It was not the result of any law — Canadian or U.S. — requiring the use of a customs broker. Other shipping companies (e.g., DHL) do not charge this unless customs duties are indeed involved.

I called UPS's international services office. They informed me that any shipment worth $25 or more requires the use of a customs broker, even if no customs duties are to be paid. That is, the fee can indeed be greater than the value of the package, far more than the amount (if any) of the duties. Nothing was said about this to Heather or me at the UPS facility where we shipped the boxes, and nothing about this is mentioned in the many papers we received at that facility.

Several things are very wrong with this situation:

• First of all, Heather and I should have been told there would be additional fees before she could collect her boxes. Any obligation to pay those fees should have been stated in the shipping papers. All this should have been disclosed at the UPS terminal where we took the packages, before we entrusted the boxes to UPS.
• The fee was disproportional to the effort expended by the customs broker. Even if he were slow, it should have taken him no longer than five minutes to determine that all the papers were in order — they had already been checked by UPS where we shipped the two boxes — and that no customs duties at all were to be paid. $30US for five minutes of work equals $360 per hour!
• UPS told me they had to collect the fee from Heather to pay the broker. Later, UPS admitted that they serve as their own broker. They collected a fee from my daughter to pay themselves for doing very little!

According to UPS's own Web pages, the total shipping charges on a 30-pound package with a value of $150 from southern California to Toronto, Canada, was $26.50. While the Web pages state:

International shipments must clear customs in the destination country. Duty and tax may be charged by the destination country.

Warning: If you ship anything to a foreign destination via UPS, ask if there will be any fees collected from the recipient. If you are told "No", get it in writing. Better yet, do not ship via UPS. Use some other shipping service or the U. S. Postal Service.

A Prevailing Problem

Sandeep sent me E-mail with a familiar story of a shipment into Canada from the United States. The customs brokerage charge from UPS was over 30% of the cost of the purchase. What was most interesting about Sandeep's message was a link to a transcript of a Canadian Broadcasting Corporation (CBC) news item from 5 December 2000. Contrary to what UPS supporters claim, this problem is not rare.

It appears that outrageous customs brokerage fees is not the only problem afflicting UPS customers in Canada. The CBC reported about the failure of UPS to deliver life-saving medical supplies and the recipient's two-year battle for a refund of the shipping charges. She finally got a refund — not from UPS, which failed to make the delivery, but from the unreimbursed pocket of the owner of the UPS Store where the shipment originated.

Fighting Back

You can avoid UPS's customs brokerage fees. Of course, you have to be near enough to a customs office to go there; and you have to plan in advance to have your package marked that you will clear customs yourself.

Frankly, I would rather direct the seller not to ship by UPS. I have shipped other packages to my daughter via Purolator and the U.S. Postal Service with no customs brokerage fees at all.

If UPS cheats you too — charging hidden fees or making the recipient of a shipment pay a charge not disclosed to the shipper — file an on-line complaint with the Federal Trade Commission (FTC). Also, notify the consumer protection agency for your state or local government. (I have already done both.) Don't let them off the hook merely because you cannot be bothered. Your own specific complaint might not be resolved, but an ongoing stream of complaints will establish a record that could lead to an investigation and enforcement action against UPS. Note that the FTC will accept complaints about UPS from residents of Canada (and other nations).

The large volume of trans-border retail business between the U.S. and Canada makes this situation particularly bothersome to merchants and consumers in these two nations. Customers in Canada find themselves billed for fees that often exceed the shipping charges and sometimes reach half the value of the merchandise. Businesses in the U.S. find shipments being refused and returned by angry Canadian customers who thought they had already paid all shipping charges. Merchants in the U.S. should require shipping companies to certify in writing that all fees have been paid before shipping. In Canada, consumers who have had shipments held for ransom by UPS should complain in writing to their MPs, making this a political issue.

However, UPS's abuses described here will likely continue until laws are enacted in both the U.S. and Canada to address this problem.

• Shipping companies that perform their own customs brokerage services — including express, delivery, freight, and other similar companies — should be required to include customs brokerage fees (not the customs duties) in their advertised shipping rates. These should be charged "up front" when the package is submitted by a merchant and not hidden until delivery.
• Shipping companies that use outside customs brokerage services should be limited to charging no more than the actual fees levied by the brokers. No markup should be allowed; a "kickback" from a broker to a shipping company should be a criminal offense. In this case, the paperwork for shipping should clearly state that a customs broker will be used and that an additional fee will be imposed.
• Recipients of shipped packages should be given the option to act as their own customs broker. This option should be explained clearly to the sender before the shipment is submitted and again to the recipient before any brokerage costs have been incurred.

In the meantime, UPS should be avoided when shipping to Canada.

Bad News and Good News

First, the bad news is that the war might be lost. It now appears that FedEx and possibly DHL have copied UPS's practice of turning customs brokerage into a profit center on shipments from the U.S. to Canada. There are now only two ways to avoid paying exorbitant brokerage fees:

• Ship via U.S. Postal Service, which hands your package over to Canada Post. The last time I did this, there was a fee of $5Cdn per package for clearing customs, much less than the amounts being charged by UPS.
• Clear customs yourself in Canada. This requires that the shipper in the U.S. clearly mark the package to indicate that the addressee will personally handle clearing customs. This also requires that the addressee lives reasonably close to a port of entry.

The good news is that, while a number of legal actions against UPS have failed, Canadians have not yet surrendered. Currently, the case of Ryan Wright and Julia Zislin versus United Parcel Service Canada Ltd is active in the courts of Ontario. Appeals by UPS to dismiss this class-action lawsuit on various grounds have all been denied, including an appeal to the Canadian federal Supreme Court.

E-Mail About This Page

More than 19 years after I first published this Web page, I still receive E-mail about it.

Some messages confirm that my complaint was not a rare, isolated incident. They relate other tales of woe with UPS. In general, the senders should all file complaints with the FTC.

However, I also receive E-mail from supporters of UPS who have complaints about this Web page. Some messages told me to direct my complaint about the added tax to the Canadian government; obviously, the senders did not read this page thoroughly. Otherwise, they would have seen that the customs brokerage fee about which I am complaining was not a tax but a fee paid to UPS for them to examine the paperwork in Toronto that they had already examined in California. The boxes I sent to my daughter entered Canada duty-free; nothing was paid to the Canadian government.

I am proud to publish some of the messages that support my complaint. I am not afraid to publish the messages that defend UPS. And some messages cannot be categorized.

Corrective Action by UPS?

I discovered that UPS's Web site now includes a chart of "customs clearance" fees for shipping to Canada. This chart indicates UPS would not charge for customs brokerage for my daughter's shipment today because the value for Canadian duties was zero (duty-free).

I would appreciate messages from anyone in Canada who received a duty-free package from the U.S. via UPS in 2010. Were you charged a customs brokerage fee by UPS?

Originally published 22 November 1998
Significantly updated 5 May 2005
Latest update 14 July 2017

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