With FedEx and UPS’s dimensional weight pricing now in effect for all Ground shipments, many businesses are faced with having to reconsider their shipping carrier and method of packaging.
To refresh your memory, dimensional weight pricing bases shipping costs on the volume of a package in relation to its weight. It’s calculated by multiplying the length, width and height of a package, and then dividing the result by a dimensional factor (UPS and FedEx use 166 for domestic shipments). This number is compared to the actual weight of the package, and the higher of the two is used to determine the base rate of the shipment.
As a result, shipping large, lightweight products, like a backpack or purse, may cost significantly more than it did in 2014.
Endicia recently surveyed over 700 businesses to understand how they feel about the FedEx and UPS dimensional weight pricing. We published our survey results on our blog along with the infographic provided below.
Here are our main survey findings:
Twenty-eight percent of online businesses hadn’t heard of dimensional weight pricing, which means they probably won’t notice its impact until they receive their FedEx and UPS invoices in 2015.
Additionally, 74 percent of businesses disagree with dimensional weight pricing because they believe it is expensive and unfair to businesses and shippers.
So what do businesses plan on doing now that they are faced with these price hikes?
80% say they will use the U.S. Postal Service for their larger, lightweight packages.
The U.S. Postal Service®, unlike FedEx and UPS, did not increase shipping costs in January 2015. In fact, it reduced Priority Mail® rates, making it an affordable option for businesses to ship heavier packages, up to 40 pounds. Lastly, the Postal Service does not apply dimensional weight pricing to packages up to one cubic foot in size.
For more results from our survey, check out the infographic below. And for more on dimensional weight pricing, read our recent blog post on the subject here.