UPS To Base Rates On Package Size
ATLANTA, GA — UPS announced it will change its rates based on the size of the package sent, starting Dec. 29.
The company will apply the new policy to all Ground and Standard to Canada services. UPS already uses the dimensional-weight method on most of its other services.
UPS claims that package density is decreasing thanks to recent e-commerce shipping trends. Package weight compared to physical dimensions is on the decline, causing cargo space to be less efficiently used. That inflates costs per package, something that UPS wants to reduce.
Alan Gershenhorn, UPS executive VP and chief commercial officer commented: "[The new rate structure] enables us to more appropriately align rates with costs which are influenced by both the size and weight of packages."
UPS believes that since bigger packages will cost more, shippers will likely reduce packaging material and sizes. What that means for UPS is less fuel consumption, emissions and transportation costs.
The move comes on the heels of last month’s announcement that rival FedEx will start applying dimensional weight pricing to all shipments effective January 1, 2015.