In January 2015, shipments in both Canada and the US will be subject to new dimensional weight pricing. The pricing change will affect bulky but lightweight packages. Traditionally, as long as these packages were shipped by ground, and had a volume of less than 3 feet cubed, these packages were only charged by weight. However, with dimensional weight pricing, the volume of the package will also be taken into consideration, with larger packages being charged at higher rates, regardless of their weight.
The price change will occur across the board, with carriers such as FedEx, UPS, USPS, and Canada Post implementing the new pricing methods.
This will be a drastic change, with shipping prices for small and bulky items expected to increase by 20 – 60%. Therefore, it’s time to change your shipping practices.
Here are some tips for reducing shipping costs under the new dimensional weight pricing.
Stock More Box Sizes
It has been typical for small businesses to only carry a few sizes of boxes. The extra cost for shipping and void filler has been so minor that it was far lower than the cost of ordering and managing extra box sizes. With dimensional weight pricing, the reverse is true. Now it makes sense to keep extra sizes of boxes in stock in order to avoid increased shipping charges.
Build on Demand Boxes
Simply stocking a few extra sizes of boxes is the simplest and easiest solution for many small businesses. However, depending on the amount of parcel shipping you do, it may make sense to custom build each box to fit each product being shipped. Companies like Box on Demand
and Packsize are making this possible with machines that make custom sized boxes in-house, as they are needed.
Split Up Packages
Under the new shipping fee structure, it may be cheaper to ship 2 smaller packages instead of one large one. Be sure to create a chart or spreadsheet, or invest in software to help you determine your most cost-effective shipping option.
Zone skipping allows shippers to reduce the cost of parcel shipping by shipping several parcels by the truckload (or even by LTL) for the first part of the journey, and then finishing the journey via parcel shipping. For example, if you were shipping from North Dakota to several Southern states, you could ship a truckload of packages to Texas, and from there, utilize a parcel service such as FedEx or UPS to ship the packages to their final destinations in Arizona, California, and Louisiana. This solution is only possible if you are shipping high volumes of products.
Whatever strategy you use, make sure to keep an eye on your shipping methods and costs in the new year, or else you could see your extra shipping costs add up.