shipping boxes, DIM charges

2017 UPS and FedEx Dimensional Rate Changes Raise the Cost of Shipping

The UPS and FedEx 2017 DIM rate change is a big reason to avoid shipping air in over-sized corrugated. UPS and FedEx are increasing the cost of shipping at a time when logistics demand has reached new highs. A recent survey highlights more than a 15% increase in e-commerce sales in 2016 over 2015 (https://www.internetretailer.com/trends/sales/us-e-commerce-sales-growth-146-q1/). 

The upcoming 2017 UPS and FedEx rate changes increase the DIM (dimensional weight calculation) from 166 to 139 on packages greater than 1 cubic foot, close to a 20% increase in Dim-based shipping charges. In addition, a surcharge of $10.50 per package will be applied to any ground package with a side 48” or greater, a change from the current 60” minimum (http://www.fedex.com/us/shipping-rates/index.html). The cost of these changes will continue to impact the bottom line of companies shipping items in oversized boxes. Typical right size boxes can save up to $2.00 and more in DIM charges per order.

Right Size Boxes will save shipping costs as the new 2017 DIM rates take affect

Right Size Boxes will save shipping costs as the new 2017 DIM rates take affect

Companies across a wide-range of industries are working to meet the tailored and timely needs of customers. The resulting product to be shipped varies widely in size, configuration, and complexity of each order. These variations lead to significant cost increases when the shipping box is not sized to fit the product.

To avoid rising shipping costs, affected companies will calculate shipping volume and associated box filler costs to evaluate if an on demand box making system can add money to the bottom line. Companies can see significant savings on DIM charges when switching to right size boxes. This savings will be even greater with the new multiplier for the DIM calculation starting in January 2017. While the potential savings in DIM charges is obviously significant, the overall cost reduction evaluation considers many factors. For example, right size boxes made on demand typically opens valuable floor space, reduces product damage, frees up working capital and can increase boxes packed per labor hour.  These factors provide additional cost reductions and increases customer satisfaction.

The Box On Demand equipment is available in different configurations with the ability to accommodate a wide-range of corrugate fanfold sizes. Machines can be provided with the patented BOD Matrix® dimensioning table and other system components for streamlining the box making process. Installations range from single units to full-scale and multiple system designs for pack-lines, inbound product packaging as well as pick to box, pick to cart applications.