What Dimensional Price Increases Mean For Your Business

Following the lead of its chief competitor, FedEx, Atlanta-based transportation and logistics bellwether UPS said that effective December 29, it will also adopt dimensional pricing in the United States.

Before this change, only packages measuring three cubic feet or more were priced this way (boxes that are 3 cubic feet in size are about 17″ x 17″ x 17,” by the way). All air express packages are already priced by size plus weight.

A lot of the E-commerce companies are still trying to figure out what exactly this means for their supply chain, but early reports are stating that large, but lightweight, packages could see a price increase of up to 40% on its shipping.

The two types of packages this will hurt most are (1) bulky, lightweight items like toilet paper or a fleece blanket; and (2) packages that have a lot of empty space.

And it should be noted that major shipping companies have traditionally followed each other when it comes to price increases. It’s a pretty good bet that if you’re not currently going to be affected by the 2015 dimensional charge changes, that you will soon.

So how should you react to the coming price change?

We recommend a simple, two-step process.

1.) Evaluate
Start by learning what kind of impact this price change will have on your packaging. There are online sources that will now allow you to calculate dimensional weight. Keep in mind that the dimensional weight will only be used in cases where it is greater than the actual weight. This can take some work, since it will require some historical information on package weights and box dimensions.

2.) Reduce
Once your packaging has been examined, carefully look for areas that can be improved. Do your boxes contain a lot of void filler? Is your pack line’s process inefficient? Do you have enough different box sizes? Do you have too many? We have found that the average package is 40% empty space, so there is almost certainly quite a bit of room for improvement.

Packsize’s On Demand Packaging® solutions are a perfect way to deal with the changing shipping landscape. Packsize allows you to make the perfectly sized box when you need it, allowing you to focus on your competencies rather than stress about your packaging. We typically save companies up to 20% of their corrugated costs.

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