How new UPS and FedEx pricing formula is affecting users
Author: Anthony Joh

The two parcel-handling giants implemented dimensional weight pricing at the beginning of this year, for ground packages under three cubic feet in size. (Larger boxes, as well as air shipments, were already being priced on that basis.)

The formula takes into account a package's size as well as its weight. It allows carriers to charge for the actual space that a shipment takes up on the truck. And it generally means higher rates for shippers – between 30 and 50 percent, according to estimates made at the time the changes were announced. Large, lightweight goods will experience the greatest impact.

Well, maybe. Joe Bartone, president of Shift Freight, LLC, a provider of less-than-truckload (LTL) services, says the proper classification of parcel freight should be “a non-event” to shippers. Which isn’t to say they won’t pay more to move their packages than before – it’s just a question of fairness, he says.

Carriers should be compensated for the use of space in their trailers, Bartone says. As for shippers, “I don’t think they should be concerned if they’re truly being honest with measurements and classifications.” On the contrary, the presence of a clear formula that applies to all packages “might take away a major headache in the form of re-pricing.”

All it really requires is a tape measure to understand what you’re going to pay for freight. Shift puts all of its packages through a dimensioner, which outputs the correct rate instantly. The formula is a simple one, even if shippers that weren’t subject to it before might have a difficult time adjusting.

There are some easy ways to minimize the impact of the pricing change... 


The following article has been published by Supply Chain Brain on May 30, 2015
    Author - Robert J. Bowman

For the full article, please click on this link

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