With the 2018 general rate increase, FedEx and UPS are further tightening the vise for oversize packages. What has changed? To start, here is a comparison of 2017 vs. 2018 parameters for oversize packages.
Overall, not only are fees increasing to $80 list for both carriers, but the definitions are tightening, and the minimum billable weight is changing (FDX).
FedEx is shaving 12” off of package length qualification for oversize, and UPS is adding this condition. Additionally, and probably of higher impact, FedEx is changing the minimum billable weight for oversize packages to 90 pounds; this has been the case for UPS for a few years, but it is a new, somewhat hidden, change for FedEx this year.
For an example, if a package qualifies for oversize according to FedEx’s definition, it will receive an $80 charge (list rate). In addition to that, the package will be billed automatically at no less than 90 pounds. That means that even at the agreed-upon custom DIM factors, shippers may still see an increase with this clause.
Who Is Most Affected?
Shippers of specialized goods that meet the first and any of the other following conditions:
- Have long or large packages
- Have no waiver for the 90-pound minimum term in their agreement (which is nearly EVERYONE who ships FedEx)
- Have lightweight/low density freight (e.g. couch cushions, cardboard retail displays)
- Ship to residences (where LTL isn’t generally an option)
- Need guaranteed delivery time/using Express services
Determining the impact of this clause will require looking at your 2017 package dimensions and assessing what packages fit into both the new definition of oversize. Additionally, examining packages that are less than 90 pounds in billed weight.
As with other changes in the GRI, there is a compounding effect of this change with the dimensional weight factor that was changed to 139 last year. It’s clear that FedEx and UPS continue to increase prices for larger boxes. We’ll eventually see an inflection point of more shippers utilizing LTL for these shipments. However, until there are better, more available home delivery services for LTL shipments, shippers will pay a premium to delivery these via parcel. The consumer will ultimately be paying for these changes in higher shipping costs at check out.
Mark Taylor is a Transportation Project Manager at enVista and a recognized transportation expert. With a background that includes operations, transportation network engineering, new service development, and parcel spend management, he brings a unique perspective to managing parcel programs.