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Shipping issues are always on the minds of online-auction sellers. I've noticed several questions come up on eBay discussion boards about pending changes from the United States Postal Service (USPS). One issue involves dimensional rates in the proposed rate changes, and another involves shipping manifests generated by online-postage systems (SCAN forms). I checked in with the USPS to find out how these changes may affect sellers.

The USPS has proposed new rates that, if approved, would go into effect next Spring. The USPS explains the proposed rates on its website at (http://www.usps.com/ratecase/welcome.htm). The proposal calls for a 3-cent increase in the price of a First-Class stamp and a new "forever stamp" that would be good for any future 1-ounce single-piece First-Class Mail letter, no matter how prices may change beyond 2007. The USPS also proposes to raise Priority Mail Flat-Rate boxes to $8.80, regardless of weight, contents or distance traveled, and seeks to make the flat-rate boxes a permanent feature of its product line.

Dimensional Weight Pricing
One of the major initiatives of the pricing proposal includes the introduction of "dimensional-weight" (or dim weight) pricing. Dim weight pricing is based on the cubic size or dimension of the mailpiece rather than the weight, and is designed to account for packages with a large size-to-weight ratio (in other words, big packages that don't weigh much in relation to their size).

According to the USPS website, "if a light-weight piece is large in size, and takes up a lot of space in transportation, it is possible that the price of mailing does not cover our handling costs. Dim-weighting is a mechanism that converts the cubic size of the piece into a weight. If a large box is very light, it will be charged as a higher-weight piece,..."

The USPS site goes on to state, "This pricing only affects pieces larger than 1 cubic foot, and traveling to destinations within zones 5-8, since it is air transportation costs that are particularly sensitive to size, rather than weight. This costing and pricing approach also leads to lower proposed prices for some heavier-weight parcels."

The dim weight pricing affects Priority Mail packages going to Zones 5-8. The "balloon" (minimum) charge would remain for zones 1-4, but the price for these large pieces would be the 20-pound price, instead of the current 15-pound price. (Balloon rate is the minimum rate charged for Priority Mail and Parcel Post items that measure between 84 and 108 inches in combined length and girth, and (currently) weigh less than 15 pounds, and proposed for parcels weighing less than 20 pounds.)

How To Measure the Cubic Size of Your Package
You can calculate the cubic size of your package by multiplying the height by the length by width (H x W x L). Round each measurement to the nearest whole inch. The resulting total is the cubic size of your package.

To determine billable weight, divide the cubic size by 194. An example published in the USPS Mailers Companion newsletter (http://www.usps.com/mailerscompanion/mayjun2006/onec.html) follows:

Dimensional weighting test: Priority Mail parcels whose length, width, and height, multiplied together, are greater than one cubic foot. Example: Parcel weighing 10 pounds measures 14 inches long, 14 inches wide, and 12 inches high. Dim weight = (14 x 14 x 12) / 194 = 2,352 / 194 = 12.12. Postage would be the appropriate 13-pound rate.

So whereas previously that 10-pound package would have been charged at the 10-pound rate, it is now charged at the 13-pound rate. Another page on the USPS website that explains dimensional weight rates is found here: http://pe.usps.com/DMMAdvisory.asp?Dest=dmmadvisory103006.htm.

Postal Reform
According to DMNews.com, the U.S. legislature passed the Postal Accountability and Enhancement Act of 2006 earlier this month (http://www.dmnews.com/cms/dm-news/direct-mail/39337.html) and the President is expected to sign the bill. It's uncertain what effect the legislation would have on the proposed postal-rate increase. However, it's still worthwhile understanding dimensional weight rates, since other carriers are putting these plans into place.

UPDATE: According to PostalNewsBlog (http://www.postalnewsblog.com), the USPS issued a DMM Advisory on Friday stating the new legislation would not effect the new rates: "We are still on target for a May 2007 implementation of new prices and mailing standards."

Dimensional Weight and Other Carriers
While USPS proposes dimensional weight rates for packages over 1 cubic foot, UPS, FedEx and DHL are changing rates next year for packages measuring over 3 cubic feet. (See carriers' websites for other 2007 rate changes.)

UPS: Effective January 1, 2007, Oversize charges for larger packages shipped via UPS Ground services will be replaced with a rate calculation based on dimensional weight.
http://www.ups.com/content/us/en/resources/prepare/dimweight2007.html Here's more on dim weight from UPS:
http://www.ups.com/content/us/en/resources/prepare/dim_weight.html

FedEx: Effective Feb. 5, 2007, the shipping charges for larger-size FedEx Ground packages will be calculated based on dimensional weight rather than on oversize package definitions. "If the cubic size of your FedEx Ground package measures three cubic feet (5,184 cubic inches) or greater, you will be charged the greater of the dimensional weight or the actual weight." Here's more on dim weight from FedEx:
http://images.fedex.com/us/rates2007/DimWeight.pdf?link=4

DHL: Effective January 1, 2007, dimensional-weight rates go into effect for DHL.
http://www.dhl-usa.com/home/home.asp

USPS SCAN Forms
Another shipping question raised by eBay sellers recently involves the Click-N-Ship SCAN form. Online sellers can show recipients that their packages are on the way with Click-N-Ship's Shipment Confirmation Acceptance Notice, or SCAN Form (PS Form 5630). Being able to show customers that the USPS has received their packages can be a powerful customer-relations tool for eBay sellers.

The SCAN Form contains a master barcode that represents the packages in a shipment and is scanned when the shipment is received by the Postal Service. This single scan enters all of associated packages into the USPS Track & Confirm database as "Shipment Accepted" and allows the shipper and the recipients to see when the package entered the mailstream. SCAN Forms are only available for labels with online paid postage.

According to Steve Rifai of online-postage service Endicia, they've had the SCAN form in the Endicia Professional service for over a year. "The USPS recently added it to Click-N-Ship and made it a formal program, so that's the news. There is no requirement for customers to use this feature - it's an added value."

A USPS representative confirmed that the SCAN is not mandatory. According to the October 26, 2006 Postal Bulletin, "The customer can give the packages to a letter carrier or bring the packages to the retail window or the back dock. When the Postal Service employee scans the barcode on PS Form 5630, every package in the shipment receives an "Acceptance" event from the Post Office."

On page 22 of the bulletin, in a section called "Customer FAQs about SCAN," is found the all important question, "Do I have to wait in line to have PS Form 5630 scanned at retail?" The answer? It depends:

"You will be able to tender mail to your carrier, drop it at the back dock, or bring it to retail or other acceptance point. If you bring it to retail, you must wait for next available retail associate unless instructed otherwise by the local office."

More information on the Click-N-Ship SCAN form is found on the USPS website:
http://www.usps.com/clicknship/scan-form.htm

And a Postal Bulletin covering SCAN is found online, see p. 19:
http://www.usps.com/cpim/ftp/bulletin/2006/pb22192.pdf

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About the author:

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.

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