A Wall Street Journal article from last May [ http://www.wsj.com/articles/SB10001424052702304655304579547632772245734 ] proclaimed that FedEx was quietly changing their pricing model for ground packages in 2015. Instead of weight as the determining factor, ground shipments will now use the “dimensional weight model.” Simply put, size now matters on all ground shipments. This model is not new and has previously been applied to all air express packages. But now, all ground packages will be charged based on this pricing model. The article predicted that UPS would follow FedEx’s lead in this, and they have.
The dimensional weight model multiplies package length, width and height in inches. That number is then divided by 166 to determine the dimensional weight in pounds.
For example, your package is 12 x 24 x 24. That multiplies out to 6,912. Divide by 166, round up and your package’s dimensional weight is 42 pounds. If your package actually weighs 42 pounds or more, you will be charged by that true weight. But, if you’re shipping a lightweight product with lots of packing filler, you will see a huge price increase with this change.
What can you do?
Use the smallest box possible for each shipment and limit fillers. Firehouse’s shipping department is already doing this for our clients with our Packsize on-demand box maker. Our boxes are made the exact size needed for each product. We already thought Packsize was a great idea, but now it’s even more critical for offering savings to our clients. Here’s a Packsize video illustrating (literally) the new shipping rates.
While we’d love to claim that we are so tuned in to FedEx and UPS’s inner workings that we predicted this change and then installed Packsize, we can’t. Truth is, we installed Packsize in the fall of 2013 in our ongoing quest to cut waste and the number of boxes stored in our warehouse. But in 2015, Packsize is making us look smarter than ever.
Vice President of Operations