“Pricing Changes Will Hit Smallest E-Commerce Shippers Hardest” on Business News Daily
By Nicole Fallon, Business News Daily Assistant Editor
In May, FedEx announced that it would begin charging by package size in addition to weight for ground services. Several weeks later, UPS followed its competitor's lead, stating that its new pricing model would go into effect on Dec. 29.
A Reuters article about UPS' announcement explained that the price hike would reduce both package sizes and the use of excess packing material. These reductions, in turn, will ultimately decrease fuel use, vehicle emissions and transportation costs for the shipping giants, which have been feeling the effects of steadily rising oil prices, UPS said.
The new dimensions-based pricing structure will affect countless U.S. businesses that rely on FedEx and UPS, including e-commerce industry leaders like Amazon, but the exact impact will depend on how prepared a company is to adapt its strategy, experts say.