{"id":4020,"date":"2014-12-01T16:28:45","date_gmt":"2014-12-01T16:28:45","guid":{"rendered":"http:\/\/shippingeasy.com\/?p=4020"},"modified":"2018-09-07T20:32:51","modified_gmt":"2018-09-07T20:32:51","slug":"ups-fedex-pricing-changes","status":"publish","type":"post","link":"https:\/\/shippingeasy.com\/blog\/ups-fedex-pricing-changes\/","title":{"rendered":"If you ship with UPS or FedEx, a big upcoming change will increase your shipping costs significantly."},"content":{"rendered":"

B<\/dropcap>oth UPS and FedEx are changing from weight based pricing to size based pricing for all shipment types<\/strong>. This means all packages will be measured by \u201cactual weight\u201d and \u201cdimensional (DIM) weight\u201d with the heavier of the two being the \u201cbillable weight\u201d. The change in pricing method is expected to lead to a 30-50% increase in seller shipping costs overall. E-commerce shippers who typically ship lightweight but large volume packages are going to be particularly hit hard unless they make some changes to the size of the packages they ship. The published impact is that 63% of packages will now be paid by DIM weight rather than actual weight<\/strong>.<\/p>\n

What is dimensional weight?<\/h3>\n

Dimensional weight, or volumetric weight, is a way for shipping carriers to make up cost for packages that are shipped in boxes that are light for their size. Since these packages are \u201cwasting\u201d space, they will be more expensive for shippers. Dimensional weight is measured by taking the volume of a packaged box (length x width x height), and dividing it by the Dimensional Weight Factor. What determines the Dimensional Weight Factor? They\u2019re actually a preset number depending on whether your package is international or not.<\/p>\n

Dimensional Factors<\/strong><\/p>\n

  • Domestic Air \/ Ground = Factor 166<\/strong><\/li>\n
  • International = Factor 139<\/strong><\/li>\n

    One way the U.S. Postal Service is taking advantage of the FedEx and UPS changes is through Cubic Pricing. Cubic Pricing<\/strong> doesn\u2019t factor weight, as long as your package weighs less than 20 lbs. and is .50 or fewer \u201ccubic feet\u201d in size. Essentially this means, if you ship smaller, very heavy packages, you can take advantage of Cubic Shipping. You can find the cubic feet of your box by using this formula:<\/p>\n

    Cubic Feet = Length x Width x Height \/ 1728<\/p>\n

    To also take advantage of the incoming Dimensional Weight changes, in September 2014 the U.S. Postal Service slashed prices on commercial Priority Mail rates to attract big e-commerce shippers in time for holiday free shipping. <\/p>\n

    Recognizing that prices were too high to be competitive on heavier weights, and to make an opportunity of the new Dimensional Weight policies, Priority Mail prices were reduced 30-50% in the weight categories most used by e-commerce shippers (6-20 lbs). E-commerce companies who can gain access to USPS Commercial Plus Pricing, like with ShippingEasy, stand to add to their bottom line this holiday season. <\/p>\n

    What this means for your E-commerce business<\/h3>\n

    Shipping can kill margins. If you ship FedEx or UPS, you will feel the effects of these changes.<\/strong> It\u2019s hard to negotiate rates and your dimensional factor with UPS\/FedEx, they typically only grant those kinds of privileges to companies with massive shipping volume. It might be time to consider USPS as a shipping carrier for most of your packages as they offer a variety of shipping options that can lead to significant shipping cost reductions. They have options including:<\/p>\n