Executive Briefings

UPS Catches Up With FedEx on Dimensional Weight Change

Two months after a similar move by FedEx, UPS has announced changes to its dimensional weight pricing schedule. FedEx plans to decrease its DIM divisor from 166 to 139 as of Jan. 2, effectively increasing the shipping costs on millions of e-commerce parcels. UPS is also lowering its divisor to 139 as of Jan. 8, but is exempting domestic air and ground parcels that are less than one cubic foot (1,728 cubic inches).

UPS Catches Up With FedEx on Dimensional Weight Change

Effective Jan. 8, UPS will follow FedEx by assessing its additional handling charge on any package whose longest side exceeds 48 inches, down from the previous 60 inches. UPS is also increase the over-maximum package charge from $110 to $150; items shipped by UPS Freight will be exempt from the charge.

As of Feb. 6, the U.S. fuel surcharge from UPS will be adjusted weekly, instead of monthly, another move that mirrors FedEx. On that same date, UPS's fuel surcharge on imported shipments will increase and be assessed independently of the U.S. air and export fuel surcharge.

“Costs are going up significantly for shippers, and the 2017 general rate increase (4.99 percent for both UPS and FedEx) is once again among the highest in history,” said Rob Martinez, president of parcel negotiation firm Shipware. “Moreover, the published rates, accessorial charges, DIM policies and fuel surcharges will not align between FedEx and UPS, making it difficult for many shippers to have an accurate, true comparison between the two.”

Martinez said UPS was right to assert that the under 1 cubic foot exemption from the new DIM factor was a price advantage on a significant number of packages. An October query of Shipware customer shipments found 41.5 percent of packages were equal to or less than 1 cubic foot.

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Effective Jan. 8, UPS will follow FedEx by assessing its additional handling charge on any package whose longest side exceeds 48 inches, down from the previous 60 inches. UPS is also increase the over-maximum package charge from $110 to $150; items shipped by UPS Freight will be exempt from the charge.

As of Feb. 6, the U.S. fuel surcharge from UPS will be adjusted weekly, instead of monthly, another move that mirrors FedEx. On that same date, UPS's fuel surcharge on imported shipments will increase and be assessed independently of the U.S. air and export fuel surcharge.

“Costs are going up significantly for shippers, and the 2017 general rate increase (4.99 percent for both UPS and FedEx) is once again among the highest in history,” said Rob Martinez, president of parcel negotiation firm Shipware. “Moreover, the published rates, accessorial charges, DIM policies and fuel surcharges will not align between FedEx and UPS, making it difficult for many shippers to have an accurate, true comparison between the two.”

Martinez said UPS was right to assert that the under 1 cubic foot exemption from the new DIM factor was a price advantage on a significant number of packages. An October query of Shipware customer shipments found 41.5 percent of packages were equal to or less than 1 cubic foot.

Read Full Article

UPS Catches Up With FedEx on Dimensional Weight Change