Prepare For 2016 FedEx Rates

FedEx Expects Dim Wt Customers

Less shippers are able to absorb transportation rates.

By Kevin RR Williams

WEBSITE Who doesn't enjoy free shipping? Based upon personal experience, FedEx has proven to be more reliable than the United States Postal Service. But following largest rate increase in history at the beginning of 2015, FedEx is raising its rates again in 2016. So anyone who offers free shipping will need to manage the fees somewhere else.

Moderate discounts are offered to frequent shippers. Spending tens of thousands of dollars annually gains more clout when negotiating rates. Companies like Apple that spend millions seemingly set their own prices. Tally up how much your company spends before calling FedEx to negotiate a possible discount to offset rate increases. Likely you will be told that discounts are calculated dynamically by the online system.

FedEx refined volume discounts with modifications to dimensional weight (dim wt) pricing in January 2015. Shippers may be able to negotiate a lower dim wt basis alongside a modest rate reduction. Typically, length, width and height is multiplied before dividing by 166 (or 139 international). If you can, for example, lower your basis from 166 to 150, you could save significant money for large packages. However, dim wt discounts may inconsequential for smaller packages or flat-rate boxes.

Blog: FedEx Expects Dim Wt Customers

How much of a rate increase is planned for 2016? Some online shopping systems have direct access to FedEx calculations. If not, new rates may be much more easily calculated than dim wt. For nearly all products, the increase will average 16 percent.

  • FedEx Express, FedEx Ground, FedEx Home Delivery®, FedEx SmartPost® and FedEx Freight rates will increase.
  • There will be changes to shipping fees and surcharges that may apply to your shipment and affect your total shipping rate.
  • FedEx® Retail Rates will change.
  • FedEx One Rate® pricing will change.

Resellers with substantial markup over products outsourced in China may be able to absorb shipping. Small-margin merchants are forced to either raise the price of mechandise or pass along the by 16 percent shipping rate increase. ClinicalPosters.com is the latter category.

Tags: carriers, coding, commerce, packages, programming, shipping parcels

References
  1. FedEx Shipping Rate Changes. fedex.com
  2. Dimensional weight calculator. fedex.com
  3. FAQ: How Do I Calculate Dimensional Weight? efulfillmentservice.com