UPS began pricing their ground shipments based on dimensions, rather than actual weight, on December 29. FedEx will follow suit on January 5, 2015. Prior to this new shipping rule, dimensional weight pricing applied only to packages that were three cubic feet or more sent by ground shipping, and to packages shipped by air.
Dimensional Weight Shipping
Dimensional weight is calculated by multiplying a package’s length, height and width, then dividing by 166:
(L x H x W)/166
Therefore, a box with dimensions of 24″ x 12″ x 12″ would have a dimensional weight of:
(24 x 12 x 12)/166 or 20.82 pounds.
If the box’s actual weight is less than 21 pounds, the shipper will still be charged the 21 pound rate.
Impact on the Merchant
If you are currently calculating your shipping based on weight, or you charge a flat-rate, you may not be collecting enough to cover your actual shipping costs. This is a great time to review the shipping rules for all of your products. Compare what you were charged under the old rates compared to the new rates. If the average increase is 15 percent, you can add a 15 percent surcharge to the rates you quote customers. The additional fee should cover your increased shipping costs.
If you provide free shipping, make sure your costs are covered. You may need to find less expensive packaging, smaller boxes, or other ways to reduce your overall dimensions.