An RDI or Residential Delivery Indicator tells you whether an address is a business or a residential location. The database of USPS monitors addresses registered particularly for commercial purposes. Authorized software and programs have access to this data.
Commercial Address vs. Residential Address
Shipping is a confusing business. Whether private or not, mail carriers tend to take actions or make decisions that are sometimes incomprehensible to us. One subject that often leaves us scratching our heads is separating a commercial and residential address.
Most mail carriers have different shipping charges for commercial and residential addresses. The rates for residential shipping tend to be higher. Unfortunately, you cannot determine intuitively whether an address is considered an office or a home by your chosen mail carrier. So, for example, if you are shipping to an address that you consider commercial, you will have to deal with a higher fee if the mail carrier marks it as a residential one.
It is because private mail carriers primarily provide service to commercial locations. Most of their routes involve industrial and commercial municipalities. So, they have to go out of their way for residential deliveries. Therefore, they charge more for residential deliveries as compensation.
So, how can you determine whether your delivery will be considered residential or commercial? Here is where an RDI becomes useful.
A Residential Delivery Indicator is how the USPS shares data regarding whether an address is considered commercial or residential. You may be wondering why USPS allows access to this data. Well, they have a motive to do so.
The USPS charges the same rates for delivery whether an address is commercial or residential. If you are already aware that FedEx and UPS will charge you more for delivery to a specific address, only because it is residential, you are more likely to opt for the USPS. It is a decent option; if your only concern is the extra cost, you will have to pay non-USPS couriers.
Both USPS and private carriers have different criteria for ‘Residential.”
Like USPS, private carriers also classify whether an address is considered commercial or residential. However, an address considered ‘residential’ by private carriers may be regarded as ‘commercial’ by the USPS.
This is because private mail carriers like FedEx and UPS classify entire areas as residential or commercial. It significantly depends on the location of the address rather than how a property is utilized.
Cities are divided into several “zones,” such as commercial, industrial, or residential. These zones generally place limitations on what is allowed to be built. They only let construction take place in their relevant zones. As a result, commercial zones are for commercial structures and residential zones for residential structures only.
To put it simply, a residential zone address is considered residential, regardless of whether the structure is utilized for commercial purposes or not. All the rest of the addresses come under the commercial category. So, according to carriers like FedEx or UPS, even if someone has a business in their home garage, the address will be classified according to the zone it is located in: a residential one. As a result, you will have to pay a higher rate for shipping if you mail anything to this business.
On the other hand, the USPS RDI will inform you whether an address is commercial or residential according to its use instead of where it is located.