There’s big news coming from UPS, FedEx and USPS. It’s news that may make you re-evaluate your shipping strategy.
As you know, every year the “Big Three” raise their rates. But in the next six months, things will get even more interesting. In early September, the USPS underwent a major rate restructuring especially in the heavier weight package category. In January, FedEx and UPS will not only announce rate changes but also switch to dimensional weight (DIM) pricing on all ground packages. These are monumental shifts in shipping, and may mean that choosing the lowest price carrier could become a lot more difficult.
How will DIM affect pricing?
The new DIM pricing for FedEx and UPS will affect many common box sizes used today. For example, let’s look at a 12x12x8 box (1,152 cubic inches.) This common box size will now be billed at a minimum of 7 pounds for UPS Ground with DIM. Using 2014 prices for a package being shipped to Zone 8, that is an increase of $3.54 for a 1-pound package. (UPS rates include a 15% volume discount off UPS Standard List Rates for packages weighing 1-10 lbs. and 20% volume discount for packages weighing 11-20 lbs. A $2.90 residential surcharge and 7.00% fuel surcharge are also included.)
A 15-pound package sent to Zone 4 in a 24x12x12 box (3,456 cubic inches) has a current published rate of $12.54 for UPS Ground. With DIM, the cost for shipping that box will be $14.06 since it would be rated as a 21-pound package starting in January.
UPS and FedEx Ground will still have lower prices than USPS for packages traveling to Zones 5 to 8 for packages weighing 6 pounds or more.
USPS becomes more competitive at higher weights
The U.S. Postal Service has undergone a major rate restructuring that took effect September 7, 2014. This restructuring actually lowered prices on heavier weight items (4 lbs. to 33 lbs. for Zones 1 to 5) for USPS Commercial Plus rates.
The new September USPS Priority Mail rates focus on heavyweight items, an area where shippers have not traditionally used Priority Mail. For example, under the proposed rates, a 15-pound package to Zone 4 will now be $7.79, a reduction of over 56% for shippers using Commercial Plus pricing. Overall, Commercial Plus Priority Mail shippers will see rates decrease up to 57% in weights between 4 and 33 pounds and Zones 1-5. Shippers utilizing Regional Rate Box “C” will also see decreases up to 54% through Zones 1-5. For the critical Q4 shipping period, this will be a great opportunity to save money prior to the peak shipping season, reducing shipping rates on Priority Mail for both Commercial Plus and Commercial Base shippers.
Stamps.com has the technology to help you make the best shipping decisions every time
Many lightweight shippers have discovered USPS Priority Mail as their best shipping option. But with all the proposed changes, Priority Mail will now play a larger role in both regional and heavyweight shipments.
Stamps.com is ready to help you make the best shipping decisions going forward. Stamps.com has small package experts ready to assist with your distribution analysis to determine which packages make the most sense with each carrier. In addition, Stamps.com’s award-winning Best Rate feature automatically selects the best shipping service based on your specifications including price, delivery speed, zone and package size. You’ll have confidence that every Priority Mail shipment sent is utilizing the best Priority Mail rate available. The Best Rate feature compares zone/weight, Flat Rate, Regional Rate and Cubic rate options. It does all the thinking for you.
As you can tell, there’s a big shift happening in the world of shipping. We’re looking forward to seeing how all these new changes will affect the shipping landscape. For you, there’s never been a better time to re-evaluate your shipping strategy.
Good luck. We wish you the best peak/holiday shipping season yet!
Rodney Small is National Sales Manager at Stamps.com, a leading provider of online postage, shipping software, shipping services and developer solutions for Postal Service customers. He can be reached at 310.429.4069 or solutions@stamps.com.
As you know, every year the “Big Three” raise their rates. But in the next six months, things will get even more interesting. In early September, the USPS underwent a major rate restructuring especially in the heavier weight package category. In January, FedEx and UPS will not only announce rate changes but also switch to dimensional weight (DIM) pricing on all ground packages. These are monumental shifts in shipping, and may mean that choosing the lowest price carrier could become a lot more difficult.
How will DIM affect pricing?
The new DIM pricing for FedEx and UPS will affect many common box sizes used today. For example, let’s look at a 12x12x8 box (1,152 cubic inches.) This common box size will now be billed at a minimum of 7 pounds for UPS Ground with DIM. Using 2014 prices for a package being shipped to Zone 8, that is an increase of $3.54 for a 1-pound package. (UPS rates include a 15% volume discount off UPS Standard List Rates for packages weighing 1-10 lbs. and 20% volume discount for packages weighing 11-20 lbs. A $2.90 residential surcharge and 7.00% fuel surcharge are also included.)
A 15-pound package sent to Zone 4 in a 24x12x12 box (3,456 cubic inches) has a current published rate of $12.54 for UPS Ground. With DIM, the cost for shipping that box will be $14.06 since it would be rated as a 21-pound package starting in January.
UPS and FedEx Ground will still have lower prices than USPS for packages traveling to Zones 5 to 8 for packages weighing 6 pounds or more.
USPS becomes more competitive at higher weights
The U.S. Postal Service has undergone a major rate restructuring that took effect September 7, 2014. This restructuring actually lowered prices on heavier weight items (4 lbs. to 33 lbs. for Zones 1 to 5) for USPS Commercial Plus rates.
The new September USPS Priority Mail rates focus on heavyweight items, an area where shippers have not traditionally used Priority Mail. For example, under the proposed rates, a 15-pound package to Zone 4 will now be $7.79, a reduction of over 56% for shippers using Commercial Plus pricing. Overall, Commercial Plus Priority Mail shippers will see rates decrease up to 57% in weights between 4 and 33 pounds and Zones 1-5. Shippers utilizing Regional Rate Box “C” will also see decreases up to 54% through Zones 1-5. For the critical Q4 shipping period, this will be a great opportunity to save money prior to the peak shipping season, reducing shipping rates on Priority Mail for both Commercial Plus and Commercial Base shippers.
Stamps.com has the technology to help you make the best shipping decisions every time
Many lightweight shippers have discovered USPS Priority Mail as their best shipping option. But with all the proposed changes, Priority Mail will now play a larger role in both regional and heavyweight shipments.
Stamps.com is ready to help you make the best shipping decisions going forward. Stamps.com has small package experts ready to assist with your distribution analysis to determine which packages make the most sense with each carrier. In addition, Stamps.com’s award-winning Best Rate feature automatically selects the best shipping service based on your specifications including price, delivery speed, zone and package size. You’ll have confidence that every Priority Mail shipment sent is utilizing the best Priority Mail rate available. The Best Rate feature compares zone/weight, Flat Rate, Regional Rate and Cubic rate options. It does all the thinking for you.
As you can tell, there’s a big shift happening in the world of shipping. We’re looking forward to seeing how all these new changes will affect the shipping landscape. For you, there’s never been a better time to re-evaluate your shipping strategy.
Good luck. We wish you the best peak/holiday shipping season yet!
Rodney Small is National Sales Manager at Stamps.com, a leading provider of online postage, shipping software, shipping services and developer solutions for Postal Service customers. He can be reached at 310.429.4069 or solutions@stamps.com.
