Tuesday, October 21, 2014

What exactly are the new DIM rule changes?

I think they've kept it very hush hush really, the fact that they will not only raising their rates but that they will be changing how they DIM Ground packages.  Starting December 29th, 2014 for UPS and January 5th, 2015 for FedEx your rates are going up, did you know?

Click here to view UPS Rate Changes

Click here to view the FedEx Rate Changes

But what does this mean exactly, right?  I think for different industries it means different things.  If you're an e-commerce/online store this could impact you a lot. 

The illustration above shows what the impact would be on packages of varying weights.  Although you need to take into consideration that there are zones, fuel surcharges, residential delivery fees and other accessorial fees that could affect pricing too but this gives you a general idea.  Some of the increases are pretty hefty.
It's a two-fold change:
Change #1 - Ground packages are currently billed on actual weight.  This means they weigh it and ship it.  Come next year, this is no longer the case.  On packages as small as 3x3x3 they will start to do what is called DIM'ing out the weight.  Here is how they do it:
Domestic shipments = LxWwH/166 = Dimensional weight in LBS
Actual weight = 3 LBS
Dimensional weight = 10x10x10/166 = 6.02 LBS
Get it?
International shipments = LxWxH/139 = International weight in LBS
Actual weight  = 20 LBS
Dimensional weight = 18x18x18/139 = 41.9 LBS
Making a little more sense now?
Change #2 - Both FedEx and UPS will raise their rates about 4.9% on Ground, Air and International Service Levels.
Crackerjack-IT can help you get ahead of this change.  There are free reports available from FedEx and UPS that will help you analyze your own shipment data.  Get ahead of this change, put processes in place, if necessary to lessen the impact to your business and your bottom line. 
Call us, we're here to help!  949.542.6072

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