New Rating System for Shipments
Effective January 2, 2015
The year 2015 will usher in significant rate increases for domestic package shipments via the US Postal Service, UPS and FedEx.
While UPS and FedEx, have announced a 4.9% increase effective January 1, 2015, it is only a minor portion of the increase. The major impact will result from the implementation of new rating structure on ALL shipments, regardless of size and weight. This structure is called Dimensional Rating (DIM), aka shape-based pricing. It’s been around for a while on international shipments and large freight items. Now it will impact ALL domestic shipping (Ground or Air) and has the potential for double-digit increases on top of the 4.9% general rate increase. DIM refers to the package density, expressed in pounds per cubic foot. If a package is big enough, or if the weight is small enough, the DIM rules can dramatically increase the shipping cost.
How does it work?
First determine the volume of the container being used. This is achieved by multiplying the exterior dimensions (length x width x height) of the package. Now divide that total by 166 (the DIM factor). The resulting number is the arbitrary DIM weight, which becomes the billable weight if it exceeds the actual weight.
It is confusing so here’s a scenario which might explain it better. Say you are planning to ship 2 packages to the same location. The first is a laptop computer weighing 5 lbs. and the second is a 14 inch tall teddy bear weighing less than two pounds. Common sense would indicate that the laptop would cost more; but under the new DIM system, that is not the case. Because the laptop’s actual weight will exceed that of its dimensional weight, it is charged at the 5 pound rate. However, since the teddy bear weighs only 2 pounds and the shipping carton is a cubic foot (12x12x12) then it is charged at the dimensional weight which is 10 pounds! The higher of the two weights is the one used to determine the shipping cost.
For the US Postal Service, these new rules apply only packages sent via Priority Mail, Express Mail (USPS version of overnight) or Parcel Post. This new rating system does NOT apply to First-Class mail. Also, it is important to note that if you use a Priority Mail Flat Rate Box or Express Mail Flat Rate Box, you are NOT subject to these new rules. Mail Services has these boxes available at no charge through the Service Window.
This new rating system has been in the works for couple of years; therefore, boxes produced within the past three years have the dimensions already printed on them.
What does this mean?
If you use an over-sized box to ship an item(s) that weighs only a couple pounds, you will pay significantly more under this new system. This new system has the potential to significantly impact students in May as they prepare to leave and ship items home.
Ways to save under the new system
- Optimize carton size. Eliminate waste/empty space within and reduce the use of filler material.
- Use space-saver vacuum bags when shipping bulky fabric items like pillows, blankets, comforters, clothes, sweaters, and so on.
- Use Flat Rate Boxes (Priority Mail or Express Mail) from the Post Office.
- If you shipping to a location within 500 miles of the college, USPS Priority Mail is usually cheaper than UPS Ground or FedEx Ground. Also, USPS uses a higher DIM factor (194 vs. 166) which results in a lower DIM weight and (usually) a lower shipping cost. With Priority Mail you still receive a tracking number; however, the tracking services provided by USPS are not as detailed as those provided by the other carriers.
The key to saving money under this new system is to reduce the volume of the contents so that they fit in the smallest carton possible.
If you bring your package(s) to Mail Services, we can provide you with price options for various carriers. Since the new system is based on the dimensions of the carton, you do not need to pack it and bring it to us. Just bring the dimensions along with the ship to address, and we can provide the minimum cost to ship. You can determine this yourself also by going to ups.com, fedex.com or usps.com.