18 DC VELOCITY OCTOBER 2017 www.dcvelocity.com
newsworthy
PeopleNet, a developer of fleet mobility
technology, has promoted Bryan Coyne
to senior vice president and general manager. … Supply chain consulting firm
Commonwealth Supply Chain Advisors has
hired Colman Roche as vice president of
consulting and Don Savage as a senior consultant. … Jay
Delaney, a product management executive with nearly
30 years of experience in the North American transpor-
tation and logistics industry, has joined TMW Systems
as senior director of product management. … Ametek
Prestolite Power, a manufacturer of motive-powered
battery chargers and other battery accessories for indus-
trial lift trucks and utility vehicles, has promoted Jeff
Harrison to business manager. … To address the compa-
ny’s recent growth, freight load-board platform provid-
er Truckstop.com has made a few organizational chang-
es: Bill Vitti has moved from chief sales officer to chief
commercial officer, and Brent Hutto, who was formerly
chief marketing officer, has accepted the newly creat-
ed position of chief relationship officer. … Schneider
Packaging Equipment has promoted Bob Brotzki to
president. Brotzki is only the third person to hold this
position in the company’s 47-year history.
COYNE
newsmakers
FedEx to slap dimensional pricing on packages handled
in concert with USPS
FedEx Corp. said that, effective late January, it will apply
so-called dimensional pricing—rates based on a package’s
dimensions instead of its weight—to its “SmartPost” service, in which FedEx parcels are inducted deep into the
U.S. Postal Service’s (USPS) vast infrastructure for last-mile
deliveries.
Separately, Memphis, Tenn.-based FedEx said it will
apply a 2.5-percent surcharge on all
shipments that are billed to a third
party that is neither the shipper nor
the consignee. The action would
mostly hit large e-tailers with steep
shipping discounts that instruct
third parties like fulfillment houses and so-called drop-ship vendors
to use the e-tailers’ account numbers when the e-tailer discounts are
greater than the third party’s price
breaks.
The moves follow the lead of rival UPS Inc., which
imposed both measures in 2015 and 2016, respectively.
FedEx also announced a series of rate increases for 2018
that will push up list prices by 4. 9 percent across the company’s three main service lines. The rate increases take effect
Jan. 1. The other charges, known in the transport trade as
“accessorials” because they are separate from a carrier’s
basic linehaul service, go into effect Jan. 22, FedEx said in
its online service guide.
On average, SmartPost handled more than 2. 5 million
packages per day in FedEx’s 2018 fiscal first quarter, according to data from SJ Consulting. Not surprisingly, FedEx
reported the highest demand for the service in its 2017
fiscal third quarter, which included the holiday period,
according to SJ data. FedEx’s fiscal year runs from June 1
through May 31.
PLAYING CATCHUP
Several attendees at last month’s Parcel Forum in Nashville,
Tenn., said they were not surprised that FedEx plans
to impose dimensional pricing on
SmartPost packages, because UPS,
which has a similar service called
“SurePost,” has reaped tens, if not
hundreds, of millions of dollars
of additional revenue through the
pricing measure. FedEx was “tired
of leaving money on the table and
watching UPS take it,” said one
attendee. Another said that shippers
were lucky the change would not
take effect until after the pre-holiday peak shipping season.
Under the carriers’ dimensional weight pricing formulas,
packages are priced by the higher of either their dimensions
or their actual weight. A package’s dimensions are calculated by multiplying its length, width, and height in cubic
inches, and then dividing the total by a set number, either
139 or 166. 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,
even though its actual weight could be much less.
Except for UPS shipments measuring less than one cubic
foot—where the divisor is set at 166—both carriers use 139
as their divisors, thus making it that much more expensive
to ship large items. E-commerce shipments—which con-
