A new factor in determining dimensional weight to calculate delivery charges on ground shipments will add significant costs for most parcel shippers.

Dimensional weight is calculated by multiplying the length by width by height of each package in inches and dividing the total by a specific factor. Effective Jan. 3, both FedEx and UPS will change the factor from 194 to 166 for Ground and Air packages that are 3 cubic feet (5,184 cubic inches) or larger for shipments within the U.S., and from 166 to 139 for International Ground shipments to Canada.

This is going to result a major rate hike for shippers, says consultant Rob Martinez, president/CEO of Transult. When parcel carriers applied the 194 express dimensional divisor to ground shipments four years ago, he says, "we estimated it generated $195m in additional revenue to the carriers. So taking both express and ground to 166 will have an enormous impact."

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