That may be the most frequently asked question we hear at our stores when a customer inquires about shipping a package. The answer to that question is “Yes . . . sort of.”
The accurate answer will depend on how you’re shipping the package. UPS and FedEx use the actual weight or the dimensional weight of the package for all express services. They use the greater of the two in calculating the price.
If you’re like most customers, you’ve never heard of dimensional weight. It’s an equation used by FedEx and UPS to determine how much space a package will take up on delivery vehicles. You multiple all three dimensions together (length, width, and height) and divide that number by 166.
Let’s say, for example, you’re overnighting pillows to your teenager that forgot to take them to camp (we always forget the obvious things, don’t we?). You pack it in a box measuring 24 x 12 x 10 with a weight of 4 lbs. The dimensional weight, or volumetric weight, however, is about 18 lbs. (24 x 12 x 10 = 2,880 / 166 = 17.3). When you take that package to your local shipping center, they will give you a price as though you were shipping an 18 lb. package because the dimensional weight is greater than the actual weight. This is how price is calculated for all express services.
Currently, ground services are exempt from the dimensional weight charge if the package is less than 3 cubic feet. All of that will change on December 29, 2014 for UPS and January 1, 2015 for FedEx when the carriers institute dimensional weight charges on ground shipments.
The policy change has sparked a debate whether the carriers are simply reaching deeper into customers’ pockets or if this is an effort to cut costs to meet the demands of an ever-changing shipping environment.
Both carriers have been encouraging shippers to either use all the void space (volume) in their parcels by adding items or use smaller shipping containers. It certainly makes sense when you see how many packages are shipped in oversized boxes with no packing material and one item rattling around inside the box. Shipping one small book that measures 9 x 7 x 3 inside an empty 16 x 12 x 10 box is excessive, but it happens all the time.
That box takes up the space of possibly five or more smaller boxes that could fit in its place on the delivery truck or van. This could equate to more trips for the carrier if the vehicles are operating at full load capacity because of unnecessarily-oversized packages. In short, the lightweight, bulky box mentioned above distorts the carriers’ pricing, and that may be the motivation behind the new policy.
Others speculate FedEx made the change in an effort to shed some of it’s business-to-consumer shipments. E-commerce continues to be a boom on society as more people order products online and have them shipped. The majority of these packages are small and bulky resulting in low profit margins for FedEx and UPS. Their focus may be on business-to-business shipments that usually comprise several packages weighing a significant amount equaling more profit.
So what does all this mean for the everyday customer going to ship packages via ground service at their local store?
It likely means a higher cost than what you’re used to. The same pricing calculator used for express services will be applied to ground after the this year. That means customers and shipping centers will have to pack items tighter to avoid the higher cost.
While this sounds like a great way to save money, it could cost you in the long run for high valued items that must have at least 2″ of packing around all sides. Packing valuables tighter or sacrificing packing materials to protect the items increases the risk of damage and claims.
Another change customers may see is the United States Postal Service gaining some much needed ground (no pun intended) on shipping. This is great news for USPS as they remain desperate for increased revenue (they had a net loss of $1.9 billion in the second quarter according to a report released by Reuters). They charge by the exact weight, which could save customers money for their bulkier packages.
The potential problem with everyone flocking to USPS is their infrastructure. It can’t handle a huge influx of packages provided by Amazon or other major online retailers. That means they’ll need to spend money–which they don’t have–on facilities, equipment, and staff to meet the new demand. Guess where that money would come from . . . the customer. USPS would have to increase their rates as well in order to provide the necessary infrastructure to meet the demand.
In short, no matter which way customers try to avoid it, this road could dead end at paying more to ship ground packages. Everyone will have to get used to playing the weight game when it comes to how they pack their items. Do you sacrifice important packing materials to get the item in a tighter box and risk it getting damaged, or do you pack it properly and pay the extra amount for the dimensional weight charge?
Despite the dismal outlook, there may be a glimmer of hope on the horizon.
Those working in the package engineering and manufacturing business have a great opportunity to find ways of getting the most out of every box. Boxes used to come in only a few sizes. Today, however, there are thousands of different boxes of all shapes and sizes with most being customizable. The upcoming changes from FedEx and UPS provide the motivation for this industry to quickly produce boxes that will help customers maximize the space they’re packing within and save them money on shipping cost.
Until then, you can take your packages to your local shipping center and ask them to help you pack the box properly to ensure everything arrives in one piece while cutting down the cost of the package.
After all, no one minds losing a little weight; especially if it keeps some money in your pocket.