A Look at the New USPS Dimensional Pricing

by LJM Group

Now it’s The United States Postal Service’s turn to impose new DIM pricing. Effective June 23, 2019, the new pricing will affect boxes shipped via Priority Mail, Priority Mail Express and other parcel shipping services.

The current Postal Service dimensional divisor (DIM) of 194 applies to boxes that exceed one cubic foot in volume, and only for zones five and above. The new DIM divisor will be reduced to 166, and will now apply to all zones.

How dramatic is this change?

Let’s look at how the change would affect a specific package. We’ll use a 15x12x8 parcel in Zone 5 as our example.

The new dimensional pricing from USPS causes a 15x12x8 zone 5 package to increase in price by 14%

Using the old 194 dimensional divisor, the billed weight would be 8 pounds (length x width x height, divided by the DIM). With the new divisor of 166, the billed weight is now 9 pounds. The Priority Mail retail rate for zone five shown here* reflects a larger than expected increase!

The old 194 DIM: 8 Pounds  = $21.70
The new 166 DIM: 9 Pounds  = $24.75
Price difference = $3.05

That’s a 14% increase in price.

Ready to get informed and start saving?

Where does this leave you? As a parcel shipper using USPS, this will certainly affect your already rising shipping costs. In today’s cost-critical e-commerce arena, being proactive is paramount to controlling your shipping spend. And, there’s no escaping these challenges in which you can expect frequent rate increases throughout the year from EVERY major Carrier, now even including the USPS, as well as FedEx and UPS.

There’s a common theme that separates exceptional shipping departments from their average counterparts: they make deep use of their shipping data in order to acquire unique insights into their overall program. And then, critically, they act on these insights to improve efficiency and cut costs.

LJM offers expert shipping consultation services and a FREE FedEx or UPS Parcel Contract Analysis. We excel at finding innovative methods to improve your bottom line and have saved our clients millions of dollars over the last 20 years. Request your free analysis or contact us here to start saving.

More strategies from LJM:

Carrier Costs 101: The Factors That Raise Your Shipping Rate

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How Carriers Set Their Prices

The Supply Chains of Tomorrow

The Amazon Effect: What Can We Learn?

Lessons from the 2018 Holiday Rush

* (Remember to bear in mind that for packages at or under one cubic foot in volume, the USPS will continue to use actual weight, not the DIM weight.)

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