Last week UPS made the official announcement that they would follow FedEx in making a significant change to the way billable weight is determined for small (<3 cu feet) packages beginning in 2015.
Currently dimensional weight is a factor for large packages but is not a factor for packages measuring less than 3 cu feet (length x width x height < 5184 inches).
If a package measures 12” x 12” x 12”, for example, the “billable weight” (the number you have to look up on a rate chart to determine shipping fee) today is whatever the package weighs. Easy to calculate. A 6 pound package is billed as a 6 pound package.
Beginning on 1/1/15 for FedEx Ground and 12/29/14 for UPS Ground things get a lot more complicated and for many packages significantly more expensive.
Here is the new rule. The SIZE of the package will be a factor in considering billable weight for ALL packages.
Billable weight for ANY package shipped by FedEx Ground or UPS Ground will now be the greater of actual weight or a number calculated by the following formula:
Package length x Package Width x Package Height / 166
Here is an example. Let’s say you are shipping a large 5 pound teddy bear in a box that measures 18” x 18” x 12”.
Actual weight is 5 pounds.
Weight according to the formula is 18x18x12 / 166 = 23.4
The 5 pound package will now be billed as a 24 pound package.
With current rates a package shipping from Chicago to Los Angeles (without regard to fuel surcharge or any ancillary charges) would cost $10.21 today or $23.05 in 2015. Huge increase!!!
The most significant change will be for relatively lightweight packages that are less than 3 cubic feet in volume (since dimensional weight is already a factor for larger packages). Some examples of effected products are pillows, stuffed animals, lampshades, rolls of bubble wrap, diapers or floral arrangements.
So now you know the new rules. WHAT ARE YOU GOING TO DO??
Here are our top 5 tips for dealing with the new billable weight factor.
- Educate Yourself – Now is the time. Before the busy shipping season is upon us, take the time to familiarize yourself with the new rules. Take a look at any package you currently ship via FedEx or UPS Ground and figure out what the shipping costs will look like with the new billing system. If you are purchasing inventory for re-sale, make sure you take the possibility of dimensional weight shipping charges into consideration when calculating your potential margin. Be particularly careful when offering items for sale including “free shipping”. For example, if you are selling that teddy bear referred to above and choose to offer FedEx Ground or UPS Ground as an option, make sure that your selling price can absorb the cost of shipping a 24 pound package across the country.
- Make sure that your box is not any larger than it needs to be. Anything you can do to make your package smaller will decrease the billable weight of the package. There are a couple of things you can do to your boxes to accomplish this. Consider using multi-depth boxes. These are boxes pre-scored to allow the sides of the box to easily (and neatly) be folded down to the appropriate height. Purchasing multi-depth boxes allows you to purchase a bundle of one size box that you can use for various products without having expensive empty space at the top. Another way to re-size any box is by purchasing an inexpensive box sizer tool. This is a handy tool that will allow you to score the four sides of any box so that you can (again, easily and neatly) fold the sides down to create a more compact package.
- Carefully evaluate what you are putting into your box. If the contents of your package can in any way be safely flattened or deflated this will be to your advantage. Definitely don’t scrimp on padding where it is needed, but try not to overpack. If you are packing clothing don’t swaddle your item in layers of bubble wrap. You have probably all received one of those packages containing a tiny item and a mountain of air pillows. Don’t do that!! If you are accustomed to filling your box with large air pillows, consider bubble wrap or some other less bulky void fill product.
- Consider other shipping providers or services. You may find that FedEx Ground or UPS Ground is no longer a viable option for your particular product. There are other choices. If you haven’t explored the options before, now is the time to look into various USPS options such as First Class Package, Regional or Flat Rate Priority Boxes, Parcel Select/Parcel Post. Note that while dimensional weight is a factor for some Priority Mail packages, it is not a factor for Express Mail. In some cases USPS Express Mail may be less expensive than FedEx or UPS Ground. Both FedEx and UPS also offer hybrid services (FedEx SmartPost and UPS SurePost) where packages are picked up by FedEx or UPS but delivered by the Post Office. These services are generally slower than regular Ground service but dimensional weight is NOT a factor and savings can be quite significant. Local or regional carriers are also available in many areas and may not use dimensional weight billing.
- Negotiate. Don’t wait until December. If you currently have a FedEx or UPS account or are considering having one in the near future, NOW is the time to get contact your representative and try to negotiate the best possible rates for your business. You might want to contact both companies and see who is willing to provide the best rates for you.
These tips were compiled my Robin and Mark Le Vine, of Bubblefast, a family owned business providing shipping supplies to the online community since 1999. Please feel free to contact us at email@example.com or (877) 599-7447 if you have any questions or would like further clarification.