Ship out a lot of packages for your business? You might get sticker shock in the new year.
United Parcel Service (UPS) and FedEx have both introduced a new pricing model for 2015 meant to deter online retailers from using needlessly large boxes. The companies will now base their shipping fees for boxes under three cubic feet by “dimensional weight”—factoring in the box’s physical size—rather than solely on its weight. UPS and FedEx already use dimensional weight for packages three cubic feet or larger.
The new pricing system could mean big spikes in shipping costs for small-business owners who aren’t careful, experts told Reuters.
For example, a woman’s shoulder bag that weighs two pounds packaged in a 19x15x5-inch box will now have a dimensional weight of 9 pounds and will cost 45 percent more to ship, according to an estimate by Endicia, a company offering online shipping solutions for businesses. (EFulfillmentService.com offers a helpful primer on how to calculate dimensional weight.)
Though the new pricing model could ding small companies’ bottom lines, there are ways to reduce the pain.
For one, the United States Postal Service (USPS) has not—at least not yet—changed its pricing and still bases its shipping fees on weight for many boxes under three cubic feet. So companies may find they can get better shipping rates through USPS in the new year.
Businesses will also want to be more mindful about the size of the boxes they use for shipping and cut down on wasted space. Needlessly using large boxes is getting more expensive in 2015—so package with care and efficiency in mind.
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