shipping

By Morgan Stallings

In 2015 UPS and FedEx will officially change the way they charge customers for lightweight shipments in large boxes. Parcel carriers are put to the daily test of maximizing the space in their planes and package cars to ensure profitability for themselves and service reliability for customers. The change in dimensional weight pricing calculations for a new portion ground shipments is not only an effort to increase their own profits, but also an effort to encourage shippers to evaluate the way their shipments are packaged and protected to promote efficiency in the industry.

How can you navigate this adjustment?

1. Evaluate boxes and packing material. Are your boxes the right size for your product? Do you have enough packaging material to protect your product without requiring a box that’s too large? The dimensional weight formula for domestic Air and Ground shipments is – L x W x H / 166. Take your most frequently used boxes and apply that formula. If the dimensional weight of that box exceeds the actual weight of the box + packaging material + the product, you will pay more to ship that product in 2015.

2. Understand the details of the change. Parcel carriers have always applied a dimensional weight calculation to all air shipments and to ground shipments with a cubic capacity over 5,184 inches (3 cubic feet).  So, the change isn’t a complete overhaul. Space is a coveted commodity for UPS and FedEx, and they want to be able to use it as efficiently as possible. This change in dimensional weight pricing targets the biggest culprit of capacity inefficiency, which is lightweight shipments in comparatively large boxes.

3. Partner with a 3PL like Fusion Logistics. The one thing we all try to avoid in business is a surprise. When you have a transportation management system that can require your shipping teams to enter dimensions, the accurate costs will be displayed upfront so there won’t be a surprise charge on your bill.

4. Negotiate more competitive incentives for heavier-weighted Ground shipments. Pricing in the parcel industry is (or should be) designed around the type of shipping you do most often – zones, service types and weight ranges that are shipped more frequently have greater incentives applied. Talk to your shipping provider about the impact of this dimensional weight change and the possibility to earn greater incentives on these shipments in the upcoming year.

Morgan Stallings is the manager of business development for Fusion Logistics. Follow at @FusionShipping.


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