Beware of the New Fedex and UPS Dimensional Weight Pricing: You May Be Paying More Than You Think

Earlier this year, both FedEx and UPS announced that they will begin applying dimensional weight rating to all ground shipments.

If you send packages using either or both of these carriers, you’ll want to be aware of how this change could impact your ecommerce business - and what you can do about it.

First off - how exactly do you define dimensional weight?

Dimensional weight is calculated when the size (in volume) of a package is used to determine the weight at which it’s rated. The length, width and height of the box are multiplied together and divided by a dimensional factor (UPS and FedEx use 166 for domestic shipments) to determine the dimensional weight.

The calculated dimensional weight is then compared to the actual weight of the package, and the higher of the two is used to determine the base rate of the shipment.

Previously, UPS and FedEx Ground service packages were only subject to dimensional weight rating if they were 3 cubic feet or larger. Beginning on December 29 for UPS and January 1 for FedEx, all ground service packages will be subject to dimensional weight rating with no minimum volume threshold. This means ecommerce businesses could see a substantial hike in shipping costs for larger, but lighter-weight packages.

The Dimensional Weight Impact
What does that pricing increase really look like? Check out these examples of common products sold through ecommerce.

Keep in mind, too, that these costs don’t include surcharges that would be tacked on later.

Tips to Identify Savings
So, what can you do to save money on shipping in the face of changes like this from FedEx and UPS? We recommend looking at your shipping mix now - before the holiday shipping rush kicks in - so that you’ll be prepared when the changes go into effect at the end of the year.

Look at the sizes and weights of the packages you ship most frequently with UPS or FedEx, especially those that are large and lightweight. Then see if dimensional weight will trump the actual weight for those packages to see what kind of impact you might experience.

And don’t forget surcharges! Fuel surcharges are calculated off the base rate, so if your base rate is higher due to DIM weight rating, your fuel surcharge will be higher, too.

Once you have an idea of how you might be impacted, check to see if the new, lower USPS Priority Mail rates would be a more economical option for you and your ecommerce business.