Every year FedEx, UPS and DHL update their rates. These include the base rates customers pay to ship a certain weight package to a certain destination as well as accessorial fees like extended area, residential, oversized, Saturday delivery, etc. It has become commonplace in the past five years to see between a four to five percent annual increase in rates. Ironically, all three carriers always raise their rates by the same amount.
The difference this year is that FedEx, UPS and DHL have also all changed their dim factors, or the number used to calculate dimensional weight. Because of the space packages take up in trucks and airplanes carriers rate their packages at the higher of actual or dimensional weight. Thus if you have a five pound package the size of a coffee table you’re going to pay much more than the five pound rate.
Since the 90′s carriers have used a dim factor of 194 for domestic and 166 for international shipments. This means that the dim weight for a 20x20x20 package would be (20x20x20)/194 = 41.24 lbs going domestic and (20x20x20)/166 = 48.19 lbs going international.
However, as of the beginning of this year all three carriers have changed their domestic factor from 194 to 166 and their international factor from 166 to 139. For our 20x20x20 package this increases the domestic dim by 16.8% to 48.19 and the international dim 19.4% to (20x20x20)/139 = 57.55.
So not only has UPS, FedEx and DHL raised their rates by around 5.1% this year, but they also raised their rates for dimmed out packages by another 16 to 19%. I guess they didn’t get the word that this country is trying to crawl out of a recession.
At ProPack we work with our clients to find the best possible shipping solution for their business needs. Not only to we pool our collective bargaining to provide great rates to our Fulfillment clients, but we are constantly on the lookout of inexpensive ways for our clients to deliver product to their customers.
There are other alternatives to standard ground and air shipment services. UPS has Mail Innovations and FedEx has Smart Post. Both these services ship ground to the Post Office nearest the consignee and then deliver via the US Postal System. They are both less expensive than ground and are not affected by dimensional weights.
UPS, FedEx and DHL like to raise their rates each year. At ProPack we work with our clients year after year to ensure they are getting the lowest rates for the services they need to delivery their product on time.
For more information please visit our website at www.propack.com.