16 DC VELOCITY NOVEMBER 2017 www.dcvelocity.com
newsworthy
UPS to raise tariff rates 4. 9
percent, shrink dimensional price
divisor on one-cubic-foot parcels
Transport and logistics giant UPS Inc. said it will raise
U.S. tariff rates by 4. 9 percent, effective Dec. 24, and will
also change the way it applies dimensional pricing—rates
based on a parcel’s dimensions rather than its weight—on
all shipments measuring one cubic foot or less, meaning
higher rates for many of those shipments.
The new rates will apply to UPS shipping services within and between the U.S., Canada, and Puerto Rico, the
Atlanta-based company said. UPS’s Memphis, Tenn.-based
rival, FedEx Corp., last month announced a 4.9-percent
increase on U.S. tariff rates, effective Jan. 1.
FedEx and UPS calculate a package’s dimensions by multiplying its length, width, and height in cubic inches and
dividing the total by a “divisor” of either 139 or 166. Except
for UPS’s one-cubic-foot shipments, where the divisor is
still set at 166, both carriers use 139. On Dec. 24, UPS will
adopt the lower divisor for packages less than or equal to
one cubic foot in size as well.
The lower the divisor, the more expensive it is to ship
items with outsized cubic dimensions. For example, a parcel measuring three cubic feet—or 5,184 cubic inches—and
divided by 166 would yield a dimensional weight equal to a
31-pound shipment. With a divisor of 139, the dimensional
weight would be equal to a shipment weighing more than
37 pounds.
The big problem for shippers is that both carriers rate a
shipment based on the larger of the dimensional or actual
weight. Thus, a lightweight and bulky package could cost a
shipper the equivalent of 10 times its actual weight. Many
e-commerce shipments fall within the one-cubic-foot mea-
surement, though it is difficult to quantify the number of
shipments that do so.
The companies say dimensional pricing is necessary to
properly compensate them for handling packages that
occupy a disproportionate amount of space aboard an aircraft or ground vehicle. As e-commerce volumes continue
to grow, the companies have said they handle a larger proportion of packages with those characteristics and can no
longer price all of them at their actual weight.
A growing number of larger and heavier items are being
ordered online as manufacturers and retailers make more
stock-keeping units (SKUs) available via websites and
mobile devices. In an effort to offset the high costs of handling these items, UPS announced a series of increases in
its shipping and handling charges. For example, a package
exceeding 96 inches in length will be subject to a “large
package” charge, effective Dec. 24. Starting July 8, 2018,
packages weighing more than 70 pounds will be hit with a
$19 “additional handling” charge.
Also on that date, the charge for a “large package” delivered to a residential address will increase to $90 from $80,
UPS said. The charge on commercial deliveries will remain
at $80. UPS defines a “large” package as either one whose
combined length and girth—two times the height plus two
times the width—exceeds 130 inches, or a package whose
longest side is more than 96 inches.
—Mark Solomon
go figure …
3,500– 4,500
The number of motor carrier partners that broker and
3PL giant C.H. Robinson adds each quarter. The size of
the average fleet that’s added is 1. 8 trucks.
SOURCE: COMPANY DATA
Forklift manufacturer Toyota Material Handling U.S.A.
has promoted Tom Lego to national manager of training
and the customer center, and Scott Redelman to national
manager of Toyota Lean Management. …
Conveyor manufacturer Dorner Mfg. Corp.
has named Scott Lister regional sales manager covering Texas and Louisiana. … Crane
Worldwide Logistics has appointed Dan
Swartz vice president of customs brokerage.
Swartz will focus on expanding the company’s customs
brokerage and trade consulting capabilities and service
offerings. … Transportation management software pro-
vider 3Gtms Inc. has named Chris van der Harst manag-
ing director, EMEA (Europe, the Middle East, and Africa).
… John Jackson and Melanie Jackson have joined com-
mercial real estate firm Cushman & Wakefield’s Tampa,
Fla., office as directors. … BDP International, a privately
owned global logistics and transportation solutions com-
pany, has hired Alberto Grajales as finance director for
Latin America. … Material handling systems integrator
Vargo has hired Abid Al-ikashi as a software quality
assurance and support professional.
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