FedEx is bringing in the new year with some new changes. FedEx made their GRI announcement for what’s to come in 2018. FedEx is following the changes made by UPS within the last year that will take place companywide as of January 1. As of January 22, more substantial changes will occur, having a negative impact on expenses for shippers. So, what does this mean for shippers?
Two major changes FedEx will start implementing in 2018 are dimensional weighting to SmartPost packages and a 2.5 percent Third Party Billing Surcharge.
- Dimensional weighing to SmartPost Packages
The change is significant going from a dimensional weight of 166 down to 139. This change will occur beginning on January 22, 2018. Contracts still await the DIM factor negotiation process for SmartPost. Although this change is new and contracts have not been negotiated, shippers will be implementing this DIM factor starting in January.
- Third Party Billing Surcharge
FedEx will begin charging 2.5 percent of the total charges across all platforms including Express, Ground, SmartPost, and International shipping. The total charges will exclude duties and taxes for all services.
These changes will have the biggest impact on companies who are using drop-shipping. Most shippers use a third party to cut costs.
FedEx did not announce these changes as part of the GRI announcement while this could cost more than a 4.9 percent transportation rate increase. Shippers don’t have much time to adapt, reassess and plan for the changes to come in 2018.
FedEx 2017 vs. 2018
- Packages with the longest side measuring 60 inches or more incurred a handling surcharge
- Oversize Charge: Packages longer than 119 inches or more than 165 inches in length and weight
- Packages longer than 96 inches or more than 130 inches in length and weight
- Oversize Charge: $80
As shippers prepare for the peak season during Holiday they should pay close attention to the changes being made. Shippers should keep in mind any and all additional charges when creating any discounts or rebates during this time. Being aware of these changes will allow shippers to develop a strategy for the overload of shipment for the Holidays.
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