USPS Introduces New Dimensional Pricing
Starting June 23rd, 2019 the US Postal Service (USPS) will alter how it calculates dimensional weight (DIM) pricing by expanding DIM pricing to all zones across its Priority Mail Express, Priority Mail and Parcel Select products, five months when DIM was initially scheduled to go into effect, Previously DIM was not applicable to all zones, only a few zones were affected. The USPS decided to delay implementing the DIM change from January to the end of June to give shippers and service providers, especially software companies, more time to prepare to absorb the impact of this change.
What is DIM?
DIM is short for Dimensional Weight. The Dimensional Weight reflects package density, which is the amount of space a package occupies on a delivery truck in relation to its actual weight. Space is important for shipping carriers since they want to keep costs low by filling their delivery trucks with as many packages as possible.
Dimensional Weight can be calculated using the formula:
DIM Weight = (length x width x height)/DIM Divisor
With this change, USPS is now more aligned with the industry and it redirects the impact of the cube across its entire cost structure. Sharon Owens, acting vice president of sales for USPS stated: “It’s been industry practice to charge DIM not just for air products but ground also”.
Additionally, the new USPS DIM Divisor will be 166, a drop from the old divisor of 194. This means the weight calculation for parcel billing purposes is length time’s width time’s height, divided by 166. The lower the divisor, the higher dimensional weight and thus the shipping cost. Packages less than 1 cubic foot is exempted from dimensional pricing at USPS, as they are at UPS and FedEx. The two other major carriers have been using a DIM divisor of 139 for ground and express shipments since January 2017.
Because of the timing of the review and approval of the new DIM divisor, along with other pricing changes, there wasn’t sufficient time to let the industry get ready for a change in January, Owens said when the change was first announced in October 2018, it caught a lot of people by surprise. There was a lot of pushback from shippers and industry partners using Parcel Select, who didn’t have the technology or capacity to collect dimensions. That’s why the USPS provided everyone more time to adapt, to put in place equipment, hardware and software. To handle this change.
Since January the USPS team has been working closely with their partners to help make sure they were ready to calculate postage charges correctly when the new DIM pricing was rolled out. USPS is still the best value as USPS DIM charges are lower than any other competitors and only applies to packages over a cubic foot.
Here are the major Dimensional Weight (DIM) changes:
The DIM Divisor will decrease from 194 to 166; this means packages greater than one cubic foot will have a higher billable weight. DIM Weight Pricing will apply to New Zone.
2. Currently, DIM Weight Pricing is only applied to zones 5-9 on select mail classes. But from June 23rd, 2019 the USPS will expand DIM Weight Pricing to all zones.
- Priority Mail: DIM Weight Pricing will be expanded to include zones 1-4 for packages over 1 cubic foot. Currently, DIM Weight Pricing only applies to zones 5-9 for packages over 1 cubic foot
- Priority Mail Express: DIM Weight Pricing will apply to packages over 1 cubic foot for zones 1-9. Currently, DIM Weight Pricing is not applied to Priority Mail Express.
- Parcel Select Ground: DIM Weight Pricing will be applied to packages over 1 cubic foot for zones 1-9. Currently, DIM Weight Pricing is not applied to Parcel Select Ground.
NOTE: Negotiated Service Agreements (NSAs) will be allowed to have a configurable DIM divisor for each Zone.
USPS has proactively notified eCommerce customers so they can make adjustments by decreasing box sizes and adjust the shipping and handling charges. As a merchant, you need to either absorb the additional costs in your margins or increase the shipping and handling to your end customers.