FedEx and UPS are putting a premium on the space available in their delivery vehicles. Expect to calculate “dimensional shipping” for packages in 2015.
And as a result, some small businesses could see an increase in their shipping costs.
The change to a new “dimensional” weighing system for packages went into effect at UPS on Dec. 29, 2014. At FedEx, it is now in effect as of Jan. 2015.
As the name of the new system implies, carriers will now be considering the size of a package in addition to its weight to determine shipping costs.
Shippers say the new system will encourage a reduction in the amount of packaging materials and overall size of packages, thus reducing fuel costs.
UPS Dimensional Shipping
UPS says dimensional rates apply to packages only. Letter rates still apply for letters. Freight falls under freight shipping rates.
Calculating dimensional rates requires you to calculate both the size and actual weight of a package. According to customer service representatives at UPS contacted by Small Business Trends, to calculate the rate:
- Multiply the length by the width by the height of your package in inches. Packages should be measured at their “extreme” points. That includes any bulges or irregularities. (UPS calls the total measure of length by width by height the “cubic size in inches.”)
- If the total is greater than 5,184, divide by 166 for shipments in the U.S. (For packages shipped to Canada, use the same denominator.) The result is the package’s “dimensional weight.”
- For international package shipments, use 139 to divide totals larger than 5,184.
- If the total is lower than 5,184, simply use the total cubic size in inches as your final dimensional weight calculation.
- Compare the package’s dimensional weight to its actual weight (on a scale). The highest number will be the package’s billable weight.
For extra large or heavy packages, additional charges may apply.
The company also announced increases in fees and surcharges. These include things like address corrections, collect-on-delivery fees, additional handling fees, and confirmations upon delivery.
The rates are outlined in this 2015 rate change page. For detailed rate information, download the UPS rate guide PDF.
FedEx Dimensional Shipping
According to its press release, FedEx Ground will apply dimensional weight pricing to all shipments. Up until this month, FedEx Ground applied dimensional weight pricing only to packages measuring three cubic feet or greater:
“This change will align the FedEx Ground dimensional weight pricing with FedEx Express by applying it to all packages. Dimensional weight pricing is a common industry practice that sets the transportation price based on package volume — the amount of space a package occupies in relation to its actual weight.”
For purposes of FedEx, you take the greater of the dimensional weight or the actual weight. Per the FedEx 2015 Service Guide (PDF):
“Dimensional weight is calculated by multiplying the length by width by height of each package in inches and dividing the total by 166 (for all shipments within the U.S. and FedEx Express shipments between the U.S. and Puerto Rico) or 139 (for all U.S. export and U.S. import-rated international shipments). If the dimensional weight exceeds the actual weight, charges may be assessed based on the dimensional weight. If the chargeable weight of a FedEx Ground package exceeds 150 lbs., a prorated per-pound rate will be used. Dimensions of one-half inch or greater are rounded up to the next whole number; dimensions less than one-half inch are rounded down. The final calculation is rounded up to the next whole pound.”
Experts insist the new billing system could lead to as much as a 45 percent increase in shipping costs for some items.
One example is a woman’s shoulder bag weighing two pounds and shipped in a box measuring 19 by 15 by 5 inches. The package would have a billable dimensional weight of 9 pounds, Amine Khechfe, general manager of Endicia told Reuters — seven pounds more than the actual weight. Khechfe’s company sells shipping solutions for e-commerce vendors.
Some vendors may instead go with the U.S. Postal Service, which still charges by actual weight for packages.
FedEx Ground Photo via Shutterstock