New ICOD Fee for UPS Parcels to the US

As of 2 June 2025, UPS has introduced a new International Collect on Delivery (ICOD) fee for parcels shipped to the United States when import charges aren't prepaid. This update impacts Australian businesses that ship internationally via UPS. Here’s what you need to know to avoid unexpected delivery costs.

Quick Summary: What’s the ICOD Fee?

UPS now applies a $12 USD International Collect on Delivery (ICOD) fee to shipments sent to the U.S. if duties and taxes aren’t prepaid. This surcharge is billed to the recipient unless charges are paid upfront via a UPS account or the International Prepayment Application (IPPA). To avoid this, include accurate contact details for your U.S. recipients so UPS can notify them in advance.

Who’s Affected and How Much Will It Cost?

This $12 USD fee applies per shipment on international parcels sent to the U.S., where duties and taxes are not prepaid. It is charged to the recipient unless the sender uses a UPS account or the International Prepayment Application (IPPA) to cover these costs in advance.

Businesses shipping regularly to the U.S. should ensure their processes support prepaid options or inform customers clearly about potential charges.

What Australian Businesses Should Do Next

To minimise disruption and avoid passing unexpected costs onto U.S. customers, Australian businesses should take the following steps:

Ensure accurate recipient contact details are included with all U.S.-bound shipments so UPS can notify customers about prepayment options.
Monitor your UPS invoices after 2 June 2025 to identify any unexpected ICOD charges.
Check with your UPS account manager to understand how the fee could affect your shipping workflows.
Use a shipping management platform like Couriers & Freight to track international surcharges across multiple carriers and improve cost control.

Wrap-Up

The introduction of the ICOD fee is a reminder of how quickly international shipping rules can change. By keeping recipient details accurate and staying on top of new surcharges, you can avoid delays and surprise costs.

Tools like Couriers & Freight make it easier to manage multiple carriers, track invoice changes, and adapt to new shipping fees in real time.