Why the Size of What Your Company is Shipping Matters

What Your Company is Shipping Matters

In recent years, carriers have targeted large packages for huge fee increases. Accessorial fees and surcharges have doubled or tripled for packages that require additional delivery handling or for shipments over a certain size.

Carriers have also been changing the definition of what counts to ship something “oversized,” so shippers are now paying these surcharges on packages that didn’t always require them.

At the same time, carriers keep dropping their dimensional divisors, meaning more and more packages are charged by dimensional weight — a measure of length, width and height — rather than actual weight, which is typically more expensive.

It’s not enough to simply fit the same product into a new box, either. When items are stuffed into a box and a package bulges, carriers will measure and charge for the bulge — especially if it puts a shipment over a certain surcharge threshold. And there’s not much shippers can do after carriers impose those fees.

This landscape can be extremely frustrating to e-commerce companies and small-parcel shippers: The rules are constantly changing, prices keep rising and it’s getting harder and harder to avoid paying them for your shipment.

To stay afloat, shippers need to understand what is considered “large,” how carriers calculate size and the key mistakes that carriers wait for shippers to make. Preemptive measures are essential to dodging these fees and lowering your shipping costs.

What is a Large Package?

As of July 2018, both UPS and FedEx applied additional fees to packages measuring more than 130 inches in length and girth combined. UPS calls this a “large package surcharge,” while FedEx calls it an “oversized charge.”

This year, both carriers added surcharges to ship packages exceeding 96 inches in length alone. So even if a parcel’s combined length and girth are below 130 inches, length comes with a surcharge too.

UPS customers should note, if they haven’t already, that the carrier is increasing its large package surcharge from $80 to $90 for residential shipments in July.

If the last few years are any indication, large packages will be targeted for further rate increases when FedEx and UPS publish rates this fall. That could mean prices increase or that existing surcharges are expanded to include more packages.

Dimensional divisors have held steady for several years now, but we believe they may start to drop again soon, meaning dimensional weight will apply to more packages than it currently does.

How Packages Get Measured

Dimensional Weight

The formula for Dimensional Weight is pretty simple: (length x width x height) / a pre-established dimensional divisor.

Both FedEx and UPS currently use dimensional divisors of 139. That means if a package’s cubic size is larger than 139, its dimensional weight will be larger than its actual weight; if its cubic size is less than 139, its actual weight will exceed its dimensional weight.

For reference, a 5x5x5 package would have a cubic size of 125 inches. Increase the length of each side by just three inches, and the cubic size jumps to 144.7 — meaning dimensional weight now exceeds actual weight, assuming the product inside the box hasn’t changed.

Typically, carriers charge according to either dimensional or actual weight, whichever is larger.

Calculating cubic size and dimensional weight for standard parcels should be common practice for shipping-based companies. If you can modify the size of a frequently shipped box so that you pay according to actual rather than dimensional weight, you could suddenly see big savings.

Printing on the Bottom of the Box

Most of the time shippers use these figures, printed on the bottom of boxes that are manufactured off-site, to understand what they can fit inside. But these numbers can also be useful for calculating dimensional weight

What’s most important for shippers to know is that carriers use these measurements. So even if they’re imperfect, shippers can use them to predict what rates their carriers will calculate.

Type of Cardboard

The external dimensions of some boxes are very different than the internal dimensions. And while shippers are typically concerned with what items can fit inside a box, carriers only see — and measure — the outside.

Generally, shippers use single-wall, double-wall, or heavy-duty cardboard. Heavy-duty cardboard can be close to an inch thick. For packages on the cusp of requiring additional handling or being priced according to dimensional weight, that extra girth can cost hundreds of dollars for e-commerce companies.

Misshapen Cardboard

Yes, carriers can and do charge to ship misshaped packages. If you’re shipping a parcel in a single-wall cardboard box and it is overstuffed, creating a bulge, then carriers will count that bulge toward a larger dimension and round it up.

For example, take a 13x13x13 package. Using UPS’s and FedEx’s current dimensional divisor of 139, that package has a billable weight of 16 pounds. But if the package is bulging and a scanner measures 13x13x13.5, it will round that 13.5 side up to 14 inches. Billable weight, after the rest of the calculations, would jump to 17 pounds increasing your overall shipping costs. All because of a half-inch bulge!

To avoid this, we recommend e-commerce retailers and shipping companies implementing a one-inch variance into package sizes, especially for parcels using single-wall cardboard boxes. That way, as long as none of your packages exceed that variance, the carrier will calculate the package size using the same dimensions you uploaded, and there are no surprises.

Need Help?

As always, Reveel’s consultants are ready and waiting to help shipping companies identify ways to save money on shipping. Understanding how package size affects what you pay is critical, especially as carriers continue to target large packages with hefty fees. To explore creative ways to make your packages smaller, avoid surprise fees and negotiate a friendlier contract, contact us today.

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