The major shipping carriers that are widely trusted in the US and outside have all raised their fuel surcharges, over sized package pricing and third-party shipping.
This has been declared recently, by FedEx, UPS and USPS now. As we already know, shipping rates are based on dimensional weight and not on actual weight of the package. Fuel surcharge depends on the DIM weight price of the package to be sent across.
FedEx and UPS reserve the right to assess fuel and other surcharges on shipments, without notice. They determine the amount and duration of any such surcharges at their sole discretion. Every service: Express/Next Day deliveries have their own surcharge fares. For example, for FedEx Express, the fuel surcharge percentage will be subject to adjustment using a rounded average of the U.S. Gulf Coast (USGC) spot price for a gallon of kerosene-type jet fuel. Each service has a unique fuel surcharge calculation index.
Very recently, it has been announced that the fuel surcharge percentage for FedEx Express and FedEx Ground shipment will vary on a weekly basis, according to weekly economics. UPS has increased rates for over sized packages and it is now 2.5% levy on all shipments that are billed “third party”.
With all these changes, businesses that ship a lot will bear the brunt when they see their invoices with billable weight difference in the ballpark of 20%. A 12x12x12 shipment’s billable weight will increase from 11 lbs. to 13 lbs. And for a 24x24x24 shipment, the billable weight will increase 84 lbs. to 100 lbs. This affects fuel surcharge also. It could impact the total cost of the shipment with a 25 per cent hike starting this January.
Find out what dimensional weight pricing means to a regular shipper.
Since the fuel surcharge fluctuates on a weekly or monthly basis, there is always scope for incorrect fuel surcharge calculation. So, shippers need to ensure that the surcharge on each shipment is according to present fuel surcharge rates.
The effect of fuel surcharges on your shipping cost may not be very significant for shippers who deal with low volumes. But for someone who ships a lot of packages very frequently, there is going to be a great impact.
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Impact of Dimensional Weight Pricing by FedEx and UPS