Both UPS and FedEx have announced shipping changes that will have a huge effect on all businesses that do any amount of shipping.
Per both UPS and FedEx’s websites, the increase is averaged at 4.9%, but as most businesses know, the announced rate increase and its actual effects on your shipping budget has little correlation. The charts below from parcelindustry.com show the evidence of sharp increases for anyone in the business of shipping product.
UPS (Using SurePost Zone 5 rates)
FedEx (Based on SmartPost Zone 5 Rates)
The dimensional weight divisor for packages less than or equal to 1 cubic foot (1,728 cubic inches) is now 139 instead of the previous 166 for all United States Domestic services. This is a huge increase to the cost of shipping for businesses who fill small orders and ecommerce businesses.
Furthermore, shippers of larger packages such as TVs, large mechanical parts, mattresses, and the like are facing significant impacts as well. The Large Package Surcharge increased a staggering 14.3% to $80. This surcharge applies to large parcels that measure a length more than 96 inches and packages with a length + girth measuring more than 130 inches total. The Over Maximum Limit Charge went up a whopping 233% to $500 (yes, you read that right).
On January 22 FedEx began applying a dimensional weight factor of 139 to all SmartPost packages. Prior to these 2018 changes, UPS held an advantage over FedEx in that their divisor under 1 cubic foot was higher, but the changes have put the companies on more even playing grounds.
These changes demonstrate the huge impact that DIM Weight charges can have, and the fact that DIM Weight changes can be much more impactful than others. If your business did not factor these significant changes into your shipping budget, give us a call. We’ve been helping businesses for over 30 years with their packaging needs, and we specialize in reducing DIM weight shipping costs.