What is an upcharge?

An upcharge is an additional fee that is added to a bill after a contract has already been negotiated.

Upcharges, which are also known as accessorial charges, are levied to cover the cost of unforeseen circumstances. On a freight bill, for example, the recipient might be upcharged for rising fuel costs, truck driver wait times or additional labor requests, such as asking the driver to move pallets into a warehouse.

Upcharges can also be levied for failing to meet a contract's requirements. For example, a retailer might upcharge a manufacturer for failing to use the correct type of pallet or for delivering a short order.