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“How the New UPS and FedEx Pricing Formula Is Affecting Shippers” on SupplyChainBrain

03/30/2015

By Robert J. Bowman

We've had a few weeks to assess the impact on shippers of FedEx and UPS's adoption of dimensional weight pricing for all ground packages. What's the picture look like now?

The two parcel-handling giants implemented dimensional weight pricing at the beginning of this year, for ground packages under three cubic feet in size. (Larger boxes, as well as air shipments, were already being priced on that basis.)

The formula takes into account a package's size as well as its weight. It allows carriers to charge for the actual space that a shipment takes up on the truck. And it generally means higher rates for shippers – between 30 and 50 percent, according to estimates made at the time the changes were announced. Large, lightweight goods will experience the greatest impact.