2015 Shipping News Highlights: USPS Price Change, DIM Weights & FedEx/UPS Fuel Surcharges

It’s no secret that here at The Savvy Shipper we love shipping — you might even call us shipping connoisseurs! So as 2015 comes to a close, we thought we’d revisit the topics that shook the shipping world this year.

Here’s the shipping news that made headlines in 2015.

1. FedEx and UPS Surprised Online Businesses with Dimensional Weight Pricing on All Ground Shipments

Many online businesses had to rethink their shipping carrier strategy in 2015, when FedEx and UPS began applying dimensional weight pricing to all Ground shipments starting in January of this year. This meant that FedEx and UPS shipping costs would be based on the volume of a package in relation to its weight — so the cost of shipping larger, lightweight products became significantly higher.

As you can imagine, most online businesses did not take this too well. As a matter of fact, based on an Endicia survey of more than 700 businesses, 80 percent of online retailers claimed that they would switch to USPS® for their larger, lightweight products in 2015.

DIM weights impacted almost every shipper this past year, and we anticipate that it will continue to impact retailers’ shipping decisions in 2016.

2. USPS Introduced Zone-based Pricing for Packages Sent to Canada

One of the biggest updates in the January 2015 USPS price change was that USPS Priority Mail International service to Canada switched to Zone-based pricing (now with seven Zones instead of the previous blended overall rate for the entire country). Rates are now determined by the U.S. origin ZIP code and Canadian destination postal code, allowing the USPS to provide accurate shipping rates instead of having to factor expensive routes into one combined rate.

This was great news for U.S. online businesses who were shipping to Canada from major U.S. cities like San Francisco or Chicago. To help our readers better understand how the carriers stacked up given the changes, we developed a FedEx vs. UPS vs. USPS shipping rates comparison chart for Canada.

3. United States Postal Service Launched ‘Watch Us Deliver’ Campaign

There’s no doubt that the USPS stepped up its delivery game in 2015, and the launch of its  interactive online dashboard is a great example of the Postal Service’s efforts. The online dashboard, launched at the 2015 National Postal Forum, serves as the centerpiece of the Postal Service’s “Watch Us Deliver” campaign, which aims to bring awareness to its enhanced package delivery service.

The site provides several fun facts about the USPS, such as the amount of mail processed in a day, as well as an added bonus — the dashboard includes a live-streaming video of two American bald eagles and their adorable baby.

4. FedEx and UPS Fuel Surcharges Increased Twice in 2015

Both FedEx and UPS increased their fuel surcharges twice this year, with the latest increases impacting online businesses during one of the busiest selling periods of the year: the holiday season. The UPS Ground® fuel surcharge index went from 4.75 percent to 5.25 percent, and the FedEx Ground® surcharge rate jumped from 3.5 percent to 4.25 percent.

Online businesses that ship via FedEx and UPS will see a small cost increase on most packages this holiday season, and the fuel surcharge increase will remain intact in 2016. Some retailers may avoid these increases by negotiating fuel surcharge rates with the carriers. We will get into the nitty gritty of this topic in the new year, so stay tuned!

For more shipping news, check out our FedEx vs. UPS vs. USPS page.

Also, for more highlights from this year, check out our 2015 ecommerce trends blog post.