UPS / FED-EX RATE CHANGES
Dimensional Weight Changes effective January 2015
In addition to the 4.9% overall rate increase for 2015, beginning in January, all ground packages shipped via UPS or FED-EX will be subject to dimensional weight rather than actual weight. This is a revision of pricing policy by UPS and Fed-Ex and it has the potential for increased costs for anyone shipping product. Up to now, the two carriers have limited the use of the volume-based formula to domestic ground packages measuring three cubic feet or greater, and for air and express shipments. According to the carriers, the new strategy better aligns the rates that they charge with costs, which is influenced by both the SIZE and WEIGHT of packages.
By subjecting all packages to dimensional weight billing, UPS and Fed-Ex are encouraging shippers to reevaluate their packaging and ensure proper box selection when shipping. They believe that this change will save them from having to make additional capital expenditures in centers, hubs and vehicles.
Dimensional Weight Basics
Dimensional weight is determined by using the following calculation: Length x Width x Height of the box divided by the applicable dimensional factor. When performing the calculation, fractions of an inch are either rounded up or down. (If the measurement is less than 1/2", round down; more than 1/2" round up.) The dimensional factors used by UPS and FedEx are 166 domestically and 139 for international shipping. The billable weight will be determined by the greater value of actual vs. dimensional.
For example:
Box: 18" x 16" x 14" with actual weight of 28 pounds
Dimensional Weight = (18 x 16 x 14) /166 = 24.29 lbs, rounded up 25lbs
Actual weight > Dimensional Weight
Pricing will be based on the actual weight
Box: 23" x 18" x 3" with an actual weight of 5 pounds
Dimensional Weight = (23 x 18 x 3) / 166 = 7.48 lbs, rounded up 8 lbs
Dimensional Weight > Actual weight
Pricing will be based on the dimensional weight
We at Winzeler Stamping Company have reviewed our current packaging and
shipping practices and determined that the new dimensional weight policy will have minimal-to-no effect on our shipping costs. However, if you haven't already analyzed how this shift in pricing will impact your own shipping costs, it may be worthwhile to collect data in preparation for 2015 and determine what changes, if any, need to be made to neutralize any increases.
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