Dive Brief:

• FedEx and UPS have made changes to their shipping rates that could translate to increases in shipping costs of up to 30%.

• Both shippers have scheduled new dimensional weight pricing for all packages shipped via domestic ground service. That means that parcels will not only be weighed, as they are now, but also measured by volume, or package size. Until now, both have only included volume measurements on very large packages.

• UPS starts its new policy Dec. 29 this year; FedEx New Year’s Day, meaning that holiday shipping will be mostly unaffected this season.

Dive Insight:

These changes make the U.S. Postal Service, which will continue to charge flat rates for many of the packages affected, look good. There are also some regional shippers that could step in to help retailers avoid cost increases.

The new policy also complicates matters for retailers offering free shipping or free returns. In any case, while large vendors will likely negotiate their own terms and possibly escape major impacts of this new policy, many retailers will face increased costs, or will have to find creative fulfillment alternatives.