Effective June 23, the United States Postal Service (USPS) will formally make a change in how it implements its dimensional weight rules. This will be done through lowering the dimensional divisor to 166 from its current level of 194, which is in line with the 139-dimensional divisor used by the parcel duopoly of UPS and FedEx.
Effective June 23, the United States Postal Service (USPS) will formally make a change in how it implements its dimensional weight rules.
This will be done through lowering the dimensional divisor to 166 from its current level of 194, which is in line with the 139-dimensional divisor used by the parcel duopoly of UPS and FedEx. The way in which a dimensional divisor works is by multiplying the package length by the width by the height, with the result being the cubic size in inches, which is then divided in inches by the divisor.
The ultimate impact, or effect of lowering the dimensional divisor, according to industry stakeholders, is that it will have long-term benefits, in that it forces shippers to optimize product design and packaging with anything that cannot be squeezed out being passed on to the customer, coupled with carriers being able to better match costs with revenues.
And since both UPS and FedEx went to a 139-dimensional divisor in 2017, it has subsequently forced shippers to have a heightened focus on package efficiency, with shippers of small boxes taking take a close look at their package dimensions and weights and either make operational changes or aggressively negotiate an improved divisor with their carrier.
In a research paper, analysts at iDrive Logistics provided an example of what the USPS dimensional divisor change would mean for a 12x12x18 zone 6 package
With USPS Priority Mail, this package would increase 10%, due to the dimensional divisor reduction, from $34.02 in the second quarter of this year to $37.34 to the third quarter of this year.
The analysis from iDrive Logistics explained that this revision affects zone application, as dimensional weight currently applies to zones 5-9, whereas the new guidelines apply dimensional weight to all zones for Priority Mail and Express packages.
In another example, iDrive Logistics used a 12x12x16, zone 4 packages with a six-pound toaster oven. This package would see a 91% increase, due to the dimensional divisor application expansion, from $9.22 in the second quarter to $17.57 in the third quarter.
“[C]ertain packages are set to experience enormous increases, “the company wrote. “Businesses shipping large, light packages to relatively proximate addresses may be well-served by exploring options with private carriers, whose base rates can be more attractive once weight climbs. When analyzing options be certain to include the impact of private carrier surcharges, which could erase the advantages of lower base rates. A slight wrinkle in the new guidelines is the carryover of the cubic foot exemption, which exempts packages under a cubic foot from dimensional rating. This stands in stark contrast to private carriers, who rely solely on a divisor to apply dimensional weight adjustments. It is an opportune time to review characteristics and pricing, particularly in light of these upcoming changes.”
- Logistics Management News
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