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UPS to Hike Tariff Rates 4.9%, Shrink Dimensional Price Divisor on 1-Cubic-Foot Parcels

(Mark B. Solomon – DC Velocity)

Transport and logistics giant UPS Inc. said yesterday that it will raise U.S. tariff rates by 4.9 percent, effective Dec. 24, and that it will change the way it applies dimensional pricing—rates based on a parcel’s dimensions rather than its weight—on all shipments measuring 1 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. Memphis-based rival FedEx Corp. last month announced a 4.9 percent increase on U.S. tariff rates, effective Jan. 1. UPS will make no change to its current fuel surcharge levels, a company spokesman said.

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’ 1-cubic-foot shipments, where the divisor is still set at 166, both carriers use 139. The lower the divisor, the more expensive it is to ship items with outsized cubic dimensions. For example, a parcel measuring 3 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. Click here to read more.

Related: UPS Predicts Record Holiday Deliveries, Defends Price Hike (AP)