Before You Sign: Five Courier Contract Clauses That Deserve a Second Look
Photo: Mr Brown, CC BY-SA 4.0, via Wikimedia Commons
For a UK SME, choosing a courier is often a commercial decision made under time pressure. The headline rate is easy to compare; the contract behind it is not. Five clauses deserve particular attention before signing—not because couriers are acting in bad faith, but because standard terms allocate risk in ways that may not suit a small business. This article offers commercial questions, not legal advice.
1. The liability cap
Most courier contracts limit liability for loss or damage to a fixed amount per parcel or per consignment, or to a multiple of the carriage charge. The cap may sit far below the retail value of the goods. Check whether the cap applies per parcel, per consignment or per claim; whether it covers both loss and damage; and whether consequential losses—such as lost profit or replacement delivery costs—are excluded. Ask what evidence is required to support a claim and whether additional cargo insurance is available. A low cap is not automatically unacceptable, but it should be matched to the value and risk of the goods being sent.
Questions to ask: What is the cap per parcel and per consignment? Does it apply to both loss and damage? Are consequential losses excluded? What evidence is needed for a claim? Is additional insurance available, and at what cost?
2. Surcharges
Fuel, remote-area, oversize, overweight, address-correction and peak-period surcharges can change the effective rate. Ask for a complete schedule, not a headline list. For each surcharge, confirm the trigger, the current amount, how often it can change and how much notice the carrier must give. If a surcharge is linked to an index, ask for the index and a worked example. A contract that allows frequent, unilateral surcharge changes may be less predictable than one with a clear review cycle.
Questions to ask: Which surcharges apply to our typical parcels? What triggers each one? How much notice is given before a change? Are the surcharges listed in the contract or in a separate schedule that can be updated?
3. Termination notice
Termination clauses are often overlooked until an SME wants to switch providers. Check the initial term, renewal mechanism, notice period and any early-termination charge. Ask how notice must be served—email, recorded post or portal—and whether it takes effect on receipt or at the end of a billing period. If the contract includes volume commitments, confirm what happens if volumes fall short. A long notice period is not necessarily a problem, but it should be a deliberate choice rather than a surprise.
Questions to ask: What is the initial term and how does renewal work? How many days’ notice are required? How must notice be served? Are there early-termination charges or volume commitments?
4. Service credits
Service credits are the contractual remedy for missed service levels. They may be expressed as a percentage of the carriage charge or a fixed amount per late parcel. Ask what counts as a service failure, how performance is measured, what claim window applies and whether credits are capped. Check whether credits are the sole remedy and whether they exclude consequential loss. A service-credit regime is useful only if the claim process is workable; a credit that requires weeks of evidence for a small sum may not be worth pursuing.
Questions to ask: What counts as a missed service level? How is performance measured? What is the claim window? Are credits capped or excluded in certain circumstances? Are credits the sole remedy?
5. Fuel adjustments
Fuel adjustments are common in UK courier contracts. They are usually a percentage added to the carriage charge and linked to an external index or the carrier’s own cost model. Ask which index is used, how often the adjustment is reviewed, whether there is a cap and how much notice is given before a change. Request a worked example based on the SME’s typical monthly spend. A fuel adjustment is not inherently unfair, but it should be transparent and predictable.
Questions to ask: Which index or formula is used? How often is the adjustment reviewed? Is there a cap? How much notice is given before a change? Can we see a worked example based on our volumes?
A short health-check routine
Before signing, obtain the full contract and any schedules, not just the rate card. Model the total cost for three scenarios: a typical month, a peak month and a month with a high returns rate. Ask for a twelve-month history of surcharge changes, if available. Confirm who will check invoices and claims internally. For contracts with significant value or unusual risk, take legal advice. The aim is not to negotiate every line, but to understand where the commercial risk sits.
A courier contract is an operational document as much as a commercial one. Reading it with the same care as a lease or a supplier agreement helps UK SMEs avoid surprises after the first invoice.
