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Merchants Face Higher Shipping Costs Due to UPS Price Change

Ecommerce pros shipping bulky but light items as part of their online sales will find changes to their UPS Ground costs soon. UPS announced this week that effective December 29, 2014, dimensional weight will be used to determine rates for ground shipments, similar to how they already use it for domestic and international air shipping.

UPS said in a statement that dimensional weight will be used to calculate the billable weight for all UPS Ground and UPS Standard to Canada packages. The shift to this method seemed inevitable when rival shipper FedEx announced its dimensional weight plans in May; FedEx will implement its new price structure in January 2015.

There is some small comfort for online sellers this year regarding the shipping changes. As UPS plans to wait until after Christmas, ecommerce sites who will be most affected by the new rates will have the 2014 holiday shopping season mostly untouched by the increase.

“UPS has been researching the potential expansion of dimensional-weight pricing for a number of years because it enables us to more appropriately align rates with costs which are influenced by both the size and weight of packages,” Alan Gershenhorn, UPS executive vice president and chief commercial officer, said in the announcement.

UPS noted how dimensional weight pricing is commonly used to determine shipping prices, taking into account the actual package size and the space it occupies in a vehicle. When the dimensional weight is greater than the package’s actual weight, dimensional weight pricing will apply.

Ideally the change will yield more efficient packaging procedures by UPS customers. UPS cited a trend toward decreased package density in ecommerce shipping causing less efficient use of cargo space. This in turn increases UPS costs per package.

But shippers can only optimize their packaging methods to a certain point, depending on the products they ship. Items that are inherently bulky but lightweight will cause online sellers to see dimensional pricing raise their costs, likely leaving them no choice but to pass those along to their customer base.

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David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.