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Shipping Rates Increase 11%
UPS, FedEx and DHL Shipping Changes Impact Furniture Makers
ANCA appreciates Gary Vensel, www.adirondackwoodfurnishings.com, for alerting artisans and retailers to the recent/still-to-come increase in shipping rates by UPS, FedEx and DHL. Nadia Korths, Craft Programs Coordinator, has added to Vensel’s email some comments posted at two blogs on www.parcelindustry.com.
Email from Vensel
Your recent announcement about the wholesale seminars reminded me to contact you to be sure you emphasize the cost of shipping to participants and any other craftsperson you know who ships their products.
Don’t know if you are aware of the UPS, FedEx, and DHL shipping rate changes, but they do seriously hurt anyone shipping large boxes. Actually, with all the other changes, the de facto shipping increase even on smaller boxes is about 11%. All three also have, or will raise, their base rates by around 4% to 6%, raised their surcharges (fuel, residential, delivery area, etc) and stopped applying any discounts to those surcharges. For a good overview, go to www.parcelindustry.com and look for an article entitled UPS Rate Analysis.
UPS, FedEx, and DHL have or soon will change how they calculate shipping weight. The biggest impact is on large packages, like those we ship our furniture in. We use UPS exclusively, so I’m real familiar with what this means, but FedEx and DHL are doing the same thing and their charges generally are within pennies of UPS.
Used to be, all of them used an "Oversize" system. If the box was over a certain dimension, you’d pay a set Oversize weight. For example, anything bigger than 84" (L+W+W+H+H) would be charged 30# or the actual weight, whichever was bigger. Our Lakesider chair ships in a box that measures 39" x 23" x 11". That means that although the chair actually weighs 25#, we paid 30# shipping (39 + 23 + 23 + 11 + 11 = 107", which exceeds the 84" limit, so it ships at 30#.)
Now, all of them are using "dimensional weight." This means you pay for box volume instead of weight. The new method only affects "large" boxes that measure more than 3 cubic feet (5184 cu. inches). The formula is weight = (L x H x W) / 194. That means for the box I listed above, the shipping weight is now 51#. (39 X 23 x 11 = 9867. 9867 / 194 = 50.86 = 51#).
A box that used to cost us $26.00 to ship to the West Coast, now costs us $40.00. The insult gets even larger when we tape two Lakesider boxes together. That totals up to 98# freight. We used to ship that box to the Albany area for about $13.50. Now, it will cost $37.16 to do so (a 177% increase!). If we ship the same box to the West coast, we’ll pay more than $57.00, used to pay less than $40.00.
UPS implemented the changes on 1/1/07. If anyone is using UPS Worldship v 8.0, the changes don’t show up. You have to use v. 9.0, which UPS didn’t get into the hands of its customers until 2 weeks into January (cute, real cute.) So, anyone using v. 8.0 is generating incorrect shipping for large packages. FedEx is implementing the changes on 2/5 (I think they’re watching what happens to UPS.) DHL will start them "sometime in the first quarter of 2007"
This issue will certainly hurt my business, both retail and wholesale. Not sure how much since anyone who makes Adk furniture will have to confront it, so the market may have to respond as a whole, and prices will have to increase universally.
Gary Vensel, www.adirondackwoodfurnishings.com
The following are some comments regarding shipping rate increases and changes.
Thursday, January 11, 2007 11:03:00 AM
Using the USPS for under 3lbs is still a great alternative in light of the increases. Priority mail will actually be coming down in price for heavier weight items with the new rates in May. A seventy pound priority parcel going to zone 8 is ping from $128 to $102 (Of course, DIM weight has been adopted for PM as well). International discounts are also available starting at 5% and topping at about 12% for Global Express.
Tuesday, January 30, 2007 3:28:22 PM
You can always offset the cost a bit by reducing your shipping insurance. U-PIC Insurance (www.u-pic.com) offers the same coverage on all carriers for about half, if not more, than 50% off what the carriers charge. UPS is now $0.55 per $100. U-PIC normally startes about $0.25 per $100.
Dec. 26, 2006 33:04 PM
You completely missed the biggest change for packages over 70 lbs - the $6 Additional Handling fee. For UPS, this applies to all services. With FDX, it only applies to ground packages. UPS still offers an pricing advantage for packages over 70 lbs., but in light of the restrictions on discounting fees, the math should prove interesting and is worthy of a second look.
Tuesday, December 26, 2006 1:53:41 PM
I wonder, how many of us continue to ship by Air in short zones when Ground would do the job? Or, how many will analyze our packaging to reduce cube (and OS, now DIM) instead of paying higher charges to the carriers? Or, how many actively manage address corrections in order to reduce them? Finally, how many of us develop packaging and determine shipping cost and damages, prior to completing development of a new product?
Or, do we simply pass it onto OUR customers (sound familiar??)?
I'm not saying we shouldn't be upset at the rising cost of shipping (or that we shouldn't seek offsets to the increase), but we need to be diligent on our end as well.
How are you adjusting to these increases? Vensel also suggested that businesses visit the websites of the shipping companies and run some dummy charges based on typical product weight.
First 35 Exhibitors Posted at Buyer Days Webpage
Four new exhibitors have already been juried in (three more waiting to be juried) 2007 Buyer Days which is to be held on April 4 and 5, 2007 in Saratoga Springs. View first 35 exhibitors signed up for Buyer Days with website links or contact info, product descriptions and booth shots from previous years at AdkNCcrafts.com.
Booth Spaces Still Available at Upstate New York Gift Expo
Rob Igoe, owner of www.northcountrybooks.com and one of the Upstate NY Gift Expo promoters, a week or so ago informed Korths that they still had some 10 to 12 booths available at the Turning Point Casino in Verona scheduled for February 19-21. www.upstatenygiftexpo.com.
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