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Starting in January 2015, every ground shipment from UPS and FedEx will have a dimensional weight (DIM) factor calculated. If this factor is more than the weight, you will be charged the DIM weight - this impacts every single person who ships packages or buys online. See how it impacts you!
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UPS/FedExChanges in 2015 Shipping Rules
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Beforethe policy change
Afterthe policy change
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3.25
Packages are charged only by weight up to
3 cubic feet.
3.25
Packages are chargedby weight and volume.
This is called DIM, or dimensional weight.
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Why the change?
Beforethe policy change
Afterthe policy change
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UPS
1,200 lbs / 2,500 lbs
UPS
2,500 lbs / 2,500 lbs
( Assumes by weight only ) ( Assumes DIM weight more than acutal weight )
UPS
1,200 lbs / 2,500 lbs
UPS
2,500 lbs / 2,500 lbs
Beforethe policy change
Afterthe policy change
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Many shipping cartons contain items that are large but are very light in weight. This is more costly to ship
for the carriers.
Shippers are able to charge for specific combinations of weight and dimensional
calculations.
How it works
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Actual weight is compared to the DIM Weight,
which is calculated by L x W x H / 166 (DIM Factor). Your shipping cost is based on whichever is greater.
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166/L x W x H( DIM factor)
Who will be affected?
Who will be affected by DIM weight?
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First: Retailers and shipperswho dispatch small to medium sized packages via ground will now pay at rates previously limited to air and international freight. Noncompliance with new packaging standards may also incur shipping delays and fines. All new costs will ultimately trickle down to consumers.
Who will be affected by DIM weight?
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Second: ConsumersOnline shoppers- Free shipping could go away, or product cost could go up. Consumers will absorb costs.
Thought: online model may need to calculate real shipping costs or add to base product cost to cover new increases in cost.
$$$
How do we adapt?
How do we adapt?
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Invest in warehouse automation, scanning and measuring tech.Invest in a variety of supplies. e.g. Different sizes of boxes/packages.
Ideas from solution perspective: Data collection on all SKU data to know beforehand what package size will need to be in conjunction with software that optimizes total pack size for multiple pieces.
Outbound side: capturing data in real time of actual shipping weight and dimensions to pass on actual charges (if shipping does not have a fixed shipping cost and pass on actual costs).
How do we adapt?
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Consumers shop smarter.Understand your real costs. Know the rules before you ship something.
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