Question
Hello to All!
Over the past few weeks I have been hearing about and researching the new proposed rates for UPS, FEDEX Ground and the USPS.
Looks like in 2007 UPS, FEDEX Ground, and the USPS will change the way packages are measured and billed. All three carriers are implementing a new (new for ground packages) dimensional weight system.
How will this affect sellers? It will greatly affect those sellers that ship larger, lighter items.
For example, we have a package that we ship via USPS Priority mail. It weighs 3 lbs and measures 20x20x12. We can currently ship this item to a zone 1 for $5.00, to zone 8 for $9.00. At the new dimensional weight, for the same product, it would be charged at the 25 lb rate! To zone 1, at the current rate a 25 lb package via Priority mail is $17.30, and the same package to zone 8 $47.40.
So, the old price, same product same zone same shipping service, Current price $9.00 New prosposed 2007 price $47.40. WOW !
Now we should be ok, this particular product can be resized into a smaller package and if need be shipped in multiple packages instead of one "larger" package. But I fear not all sellers will be able to do this.
Here is how the dimensional weight will be calculated for the USPS Priority Mail.:
How to Determine a Priority Mail Dimensional-Weight Price
For rectangular (box-like) items, measure the length, width, and height. The length is always the longest dimension. Round off each individual measurement to the nearest whole inch (20-1/4 inches is considered 20 inches; 20-3/4 inches is 21 inches). Next, multiply the length by the width by the height. The result is the cubic capacity expressed in cubic inches. If the result is 1,728 cubic inches or less, the parcel is less than 1 cubic foot and [UTF-8?]dimensional‑weight pricing does not apply. If the result exceeds 1,728 cubic inches, divide it by 194 (the "dim factor") to determine the dimensional weight. Round up any fraction of a pound to the next whole pound to get the dimensional-weight price for the parcel. If the actual weight of the parcel exceeds the dimensional weight, base the price on the actual weight.
Example:
21 x 20 x 20 = 8,400
8,400 / 194 = 43.29 pounds
43.29 rounded up is 44 pounds
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I am surprised that this has not been in the media or talked about much online as of yet, not that I have come across. This will affect a large portion of sellers of all sizes. Sellers need to be educated now, as these new rules take effect in January 2007. Some sellers may be able to break down their offerings into multiple smaller packages, instead of shipping one large package and paying the higher rate.
I have put together more information on our BLOG on this subject, compiling all of the facts I can find on this for all three carriers UPS, USPS Priority mail and FedEx Groud.
Check it out and be prepared for 2007!
http://fast-pack.blogspot.com
One of our Shipping representitives told me this is the biggest change to the shipping industry in 50 years. He expects angry customers calling once they get their first couple of bills and find out about the changes the hard way.
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This completely stinks.
If I were ya'll-I'd do some damage control. Email/call all of the customers that would be affected when they place their order and let them know. Good customer service is invaluable
Originally Posted by fast-pack
One of our Shipping representitives told me this is the biggest change to the shipping industry in 50 years. He expects angry customers calling once they get their first couple of bills and find out about the changes the hard way.
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I'm totally screwed. I ship quite a few large, light-weight items.
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I'd like to know who is involved in the downfall of online selling? Between fees to sell going up, postage going up, the IRS itching to grab everything, etc. there will probably be a total collapse of online selling if this goes through
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USPS has FILED for a change in the way PRIORITY pkgs are charged. The paragraph quoted above comes from their explanation of how that will probably work.
http://pe.usps.com/DMMAdvisory.asp?D...sory103006.htm
Here's a list of the proposed rates (rate case)
http://www.usps.com/ratecase/highlights.htm
Some priority mail info:
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.
IF it is approved, it won't go into effect until Spring 2007 at the earliest.
I don't see anything that says it has been approved...
If you do, please post a link here.
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I had already sent them an email about this. Is there anywhere we can sign to protest, send them or the body responsible for approving it, an email, etc.
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I think the deadline for response was Nov 13, but I could be wrong about that. This was announced months ago. The USPS site has a rate case area with the info.
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oops-I haven't sold in so long but I didn't get an announcement and I'm on their mailing list.
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Here's the Nov 13 date info
http://www.dmnews.com/cms/dm-news/di...ail/38836.html
It does sound like there'll be another response period in January, to fine-tune the rules/rates.
And from another place at the dmnews site:
Postmaster General Jack Potter stated that the USPS was preparing for a Rate Case implementation date of May 6, 2007
Here's an old article from a nonprofit organization that explains the timing of rate cases...
http://www.nonprofitmailers.org/capitol/page5o-a.htm (the dates are 2005... but the basics haven't changed as far as I know.)
Here's a list of a business Direct Marketing group of info that they think is important
http://dmnews.resultspage.com/direct...rease%20weight
Most of the info you'll find at these sites is about presort discounts, not about RETAIL prices, which is what most of us use.
And according the dmnews site, the Fed Ex rate increase starts Jan 1.
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Originally Posted by mommygonecrazy
This completely stinks.
If I were ya'll-I'd do some damage control. Email/call all of the customers that would be affected when they place their order and let them know. Good customer service is invaluable
FYI, we are working on solutions and for the most part have it under control. We are lucky, most of our products can be resized and cost should not effect our products much at all, with the retooling of how they are packaged.
Also, to clarify something in the first post, when I said:
One of our Shipping representitives told me this is the biggest change to the shipping industry in 50 years. He expects angry customers calling once they get their first couple of bills and find out about the changes the hard way.
I meant a REP from one of the companies with the shipping increase, not fast-pack! He sees a PR nightmare coming for these companies, and all REPS alike, as they will all be feilding phone calls from angry customers when they find out.