Now that you’re accustomed to Dimensional Weight pricing, the carriers are raising the price – by 20% in most cases.
In January, both FedEx and UPS changed the Dimensional Weight (DIM) divisor for US domestic service packages from 166 to 139.
Since 2016, all packages are priced by multiplying the length x width x height. That product is then divided by dimensional weight divisor. A lower divisor results in a higher price. A divisor change from 166 to 139 results in a 20% price increase.
This change will affect shippers sending large, lightweight items the most. UPS packages less than 1,728 cubic inches will keep the original divisor of 166.
In order to minimize the impact of this change, shippers can adopt more efficient ways of packaging their product. Most shippers went through that exercise two years ago when the carriers adopted Dimensional Weight pricing.
The best way to avoid this price increase is to utilize Refund Logistics’ Contract Engineering service to renegotiate carrier contracts. FedEx & UPS agreements can be renegotiated at any time with a 30 day notice. Through lower rates, and negotiating a custom DIM factor into those agreements, shippers can more than offset this latest carrier price increase.