Why Shipping Big Boxes Via Ground Delivery Just Became More Expensive
January 14, 2011 
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This is a guest post by Randy Pickard. If you want to guest post on this blog, check out the guidelines here.
For ecommerce shippers of large lightweight boxes, the term “dimensional shipping weight” is almost as reviled as better known phrases such as “tax audit”. Until 2007, most packages shipped by ground delivery services were billed based on weight. The concept of dimensional weight was introduced by the transportation industry as a means of capturing higher rates for large packages. Large packages are now subject to being billed at whichever rate is higher, actual weight or dimensional weight.
Fedex and UPS reduced their dimensional weight factor from 194 down to 166 on January 3. This change increases the dimensional weight on a large package by 17% and the shipping charges by 5-15%. This rate change has not received much media attention, probably in large part because a change in dimensional weight factor seems innocuous. Further, the arcane nature of the change has succeeded in avoiding the bad publicity that the announcement of a rate increase of up to 15% on shipping large boxes would set off, particularly because it is on top of a 4.9% increase in net costs for all shipments.
Dimensional weight is calculated by multiplying length x width x height and dividing by a dimensional weight factor. Up until January 3, 2011, Fedex and UPS used 194 as the “oversize” box factor. In an example of how this impacts shipping costs, hand held shopping baskets offer a good example. A set of 12 shopping baskets ships in a carton that measures 18 x 14 x 30 for a cubic size of 7560 inches. Using the dimensional factor leads to a calculated weight of 39 pounds. Prior to 2007, shipments of shopping baskets were billed at their actual weight of 22 pounds. This oversize box penalty applies to packages that are three cubic feet (5,184 cubic inches). Smaller packages rates are still based exclusively upon weight.
How does the change in dimensional rate factor increase your costs if you ship a large package? In the case of shipping a carton of shopping baskets from Chicago to Los Angeles, the cost increased from $42.99 in 2010 to $52.07 in 2011.Thus, if you are thinking about shipping a box of popcorn after January 3rd, get out your tape measure and make sure that the cube of the box is less than 3 feet (5,184 cubic inches). If feasible, it may be appropriate to have packaging redesigned to get cartons under three cubic feet.
Shopping Baskets Plus is having new cartons produced that will hold 11 baskets. Obviously, this is a rather odd number to be merchandising, but the difference in freight on a shipment from Chicago to Los Angeles makes doing so appropriate. The freight charge on a carton with 11 baskets will be $20.62 based on it being charged the 15 pound actual weight rate. The freight charge on a box of 12 baskets will be $37.97 based on a dimensional weight charge of 32 pounds. So despite the success of the ground delivery shippers in avoiding bad publicity about their rate increase, it is a change about which ecommerce shippers of large packages need to be keenly aware.
Randy Pickard is the General Manager of Shopping Baskets Plus, a supplier of plastic shopping basket to retail stories, and the editor of the Internet Marketing Remarks blog.
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