How does this affect retailers? One may wish to reduce package sizes and consider using USPS instead. This may also help slow Amazon's encroachment on Main Street, mom & pop stores. However, some people think it will giv Amazon an additional advantage.
Please find the Reuters article below.
More information and examples can be found here:
http://www.reuters.com/article/2014/12/29/us-ups-fedex-pricing-idUSKBN0K71BJ20141229
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FedEx, UPS Recalculate, Raise Rates
Posted by Reuters on Dec 31st, 2014
By Nick Carey
CHICAGO -- United Parcel Service (UPS) and FedEx (FDX) are rolling out pricing systems to curb online retailers' large package sizes. That means, of course, higher rates.
Starting Monday, UPS and FedEx will no longer charge for U.S. ground packages under 3 cubic feet by weight but by their "dimensional weight." Instead of simply weighing a box, retailers must multiply its length by its height and width, and then divide that by 166 to reach its dimensional weight.
"We believe this (dimensional weight pricing) will encourage customers to reduce their package sizes," Bill Smith, UPS vice president of marketing, told Reuters.
UPS and FedEx announced the change in May and have worked to help customers adjust. But some small firms lack the resources to change packaging and may switch to the U.S. Postal Service, said Amine Khechfe, general manager of Endicia, which offers shipping solutions for e-commerce vendors. Under the new systems, according to Endicia, a woman's shoulder bag weighing 2 pounds -- shipped in a box measuring 19 by 15 by 5 inches -- will have a dimensional weight of 9 pounds and cost 45 percent more to ship.
Tags:
fedex ups e-commerce usps amazon main street mom and pop
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