This is a generic error message that can relate to a multitude of different causes (Many of them perfectly legitimate).
Yes.
This (the AP module) works on the concept of parcels, rather than items,
As long as correct weights and dimensions are specified (per item) the module will calculate costs based on the size and weight of the total package.
Each of the different types of shipping methods have their own 'handling fees', which is added as a one time only fee per parcel (not per item).
Cheers
Rod
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