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Understanding Next Week’s Postal Rate Hike

USPS
Understanding Next Week's Postal Rate Hike

New US postal rates took effect on January 27, 2019, but there was a “Part Two” that kicks in on June 23, 2019, having to do with DIM Weight. That stands for dimensional weight, a pricing method shipping carriers came up with to charge more for packages that are lightweight, but take up a lot of room. Think of a large box of pillows – carriers want to charge for the room that box takes up in their trucks and planes.

Here’s a shortcut to calculating a package’s DIM Weight (each carrier sets their own divisor):
(Length x Width x Height)/DIM Divisor

The good news is that not every seller will feel the change. Pitney Bowes spokesperson Brett Cody said the majority of ecommerce parcels are smaller than the 12x12x12 threshold for USPS (the equivalent of a cubic foot), and therefore would not be impacted.

But there’s what you might call the Pillow Effect that will impact sellers of large, lightweight goods. As a seller discussing the changes on the Etsy discussion boards wrote, “Wreath sellers, shops that sell large decor items and/or vintage shops that sell really oversize items will probably have to rethink selling online.” That seller estimated they would pay $12 more in shipping some of their items to certain zones than they currently pay.

What’s Changing on June 23rd
Currently the USPS DIM divisor is 194, and it only applies to Priority Mail parcels larger than a cubic foot for packages going to zones 5-9.

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Beginning June 23, the USPS is changing the DIM divisor from 194 to 166 (the lower the number, the higher the rate); it’s expanding DIM Weight to all zones; and it’s expanding DIM Weight pricing beyond Priority Mail to include Priority Mail Express and Parcel Select Ground.

What is not changing is the box size – USPS DIM Weight still applies only to boxes larger than a cubic foot (1728 cubic inches).

Calculating DIM Weight
To calculate dimensional weight: first multiply the length, width and height of your package in inches. That gives you the cubic size of the package. If DIM Weight applies (over 1728 cubic inches), you divide the cubic size of the package by the appropriate DIM divisor to get the “dim weight.”

You then compare the DIM Weight to the actual weight of the package. Whichever is higher is the billable weight.

Sellers Impacted by the June 23 Postal Rate Change
Stamps.com Vice President of Online Marketing Eric Nash has delved into the issue and identified three issues.

First, a look at the impact of the new DIM divisor, using as an example a 16″ x 14″ x 12″ box that has two pillows in it (actual weight of 2 lbs).

At the old DIM divisor, the cost would be:

  • OLD: 16 x 14 x 12 = 2688 cubic inches, divided by 194 (old divisor) = 13.85 or 14 lbs.
    Package going to Zone 4 in Priority Mail would cost = $17.57
  • NEW: 16 x 14 x 12 = 2688 cubic inches, divided by 166 (new divisor) = 16.19 or 17 lbs.
    Package going to Zone 4 in Priority Mail would cost = $20.35

That’s an increase of $2.78.

But Nash agrees that most sellers won’t be impacted by the move to a lower DIM Divisor since most USPS packages are under one cubic foot and thus do not have DIM applied by the USPS.

A second issue involves a small group of very savvy sellers who had found a money-saving strategy for certain packages – a strategy that will no longer work beginning June 23 when the USPS expands DIM Weight to all zones for Priority Mail.

Nash explained the strategy as follows:

“Prior to June 2019, the USPS has not applied DIM weight pricing to Priority Mail packages going to Zones 1 to 4. If the package was under 20 lbs. and between 84″ and 108” in combined length and girth, they charged “balloon pricing” which was Zone 4 at 20 lbs. At that rate, typically UPS Ground or FedEx Home Delivery would be cheaper.

“But savvy sellers that had bigger, light weight packages under 84″ in girth/length and going to Zones 1 to 4 could get a tremendous shipping deal.”

He used the same example as above – a 16″ x 14″ x 12″ box weighing 2 lbs.

First, look at the package measurements from the balloon pricing perspective: Length would be 16″ and girth would be 28″ (2 x 14″) and 24″ (2 x 12″), for a total of 16 + 28 + 24 = 68″.

“Since this package is not over 84”, we can ship it using Priority Mail at actual weight of 2 lbs. at $7.88. (Remember DIM would be 17 lbs. at 166 divisor.) Keep in mind this package would have had DIM Weight for UPS and FedEx at 139 divisor, so the price would have been much higher if they had used UPS or FedEx.

“This hidden USPS secret has been an incredible steal for shippers over the years as long as their package was under 84″ in length and girth and traveling to Zones 1-4.”

The bottom line: “Now that this is changing and DIM will be applied by the USPS, most likely these online sellers will start using UPS Ground or FedEx Home Delivery for these packages,” Nash said.

A third issue with the new June 23 rates is the expansion of Dim Weight to other services.

“With the new DIM changes in June, Priority Mail Express and Parcel Select packages will now all have DIM weight pricing for packages over 1 cubic foot, for all zones.”

However, Nash said, “Overall, I don’t think this will impact too many sellers since delivery on Parcel Select was much slower compared to Priority Mail – most sellers would use Priority Mail since it only cost an extra $0.10 over Parcel Select.

“The one exception to this is sellers who shipped hazardous material and could not use Priority Mail – this will be much harder for them.”

Keep an Eye on Calculated Shipping Settings
Etsy sellers who use calculated shipping should take note of the marketplace’s package preferences settings. The Etsy seller referenced earlier in this story noted that when they list boxes in package preferences, they make sure that none of them are over 1 cubic foot, and they don’t use Etsy’s “common box sizes.” You can find more information about the settings on the Etsy Help section.

Another Etsy seller raised an interesting aspect of the change on this thread, and one shared a tip on how to potentially avoid overcharging sellers of multiple items from their shops.

Finally, note that UPS and FedEx also use DIM Weight pricing, but be aware it applies to all box sizes, and they set their own DIM divisors.

Leave a comment if you have tips of your own to share. And see, “Some Large Merchants Get a Pass on DIM Weight Pricing” in the EcommerceBytes Blog.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

2 thoughts on “Understanding Next Week’s Postal Rate Hike”

  1. I dealt with dimensional weight pricing a lot in the past when selling lamps, but very rarely now. This past holiday season, I had a Christmas decor set that includes 3 large ceramic pieces. To ship them together would require dimensional weight pricing at both the USPS and UPS.

    I know roughly what it costs to ship the other smaller boxes and had the thought that it would probably be cheaper to ship them in two boxes. So I tried it out and sure enough! A lot cheaper!

    Of course, there are some things you can’t just break up into separate packages and I feel for those who are having to deal with this change. I’m beginning to wonder if we’ll ever get a break on shipping even after other countries are required to pay more.

  2. I am a reseller on ebay, etsy & posh. An ecomm trainer just put out an easy to follow short video on youtube a week or so ago, just for Dimensional Shipping. It is very easy to follow. I know everyone in our seller community used the video to figure it out. Hope it helps you all. You can find it youtube search under dimensional shipping. Here is the link to his video (bolorama channel) https://youtu.be/lWFd4rarax4

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