By Brittany Beecroft, Director of Parcel Pricing, AFS
FedEx Air shippers have long seen dimensional logic applied to each package—if the package shipped in a non-FedEx box or tube. Lightweight Air shippers who try to avoid “the dim” or simply prefer to use FedEx packaging over their own do not always come away unscathed. If you look at an invoice and question how you continue to pay so much for a six ounce bathing suit, the culprit is likely Minimum Billable Weight.
Minimum Billable Weight applies to all Domestic and International Air shipments packaged in a FedEx Express box or tube. The trigger for this surcharge (as it is considered contractually) is the FedEx packaging. If you use your own packaging you will be subject to the dimensional weight applied to your shipments. If you use FedEx’s packaging you become subject to the Minimum Billable Weight (MBW).
Minimum Billable Weight applies to the following (per the 2015 FedEx Service Guide):
• A minimum billable weight of 2 lbs. applies to the FedEx Small Box, FedEx Medium Box, FedEx Large Box, and FedEx Extra Large Box for U.S., U.S. Export, and U.S Import-rated shipments
• A minimum billable weight of 7 lbs. applies to the FedEx Tube for U.S. shipments
• A minimum billable weight of 9 lbs. applies to the FedEx Tube for U.S. Export and U.S. Import-rated shipments
So what do the Minimum Billable Weight and the lightweight air shipper have in common?
If you ship bathing suits for example, and your shipment weighs less than 2lbs, FedEx will round up your shipment weight to 2lbs, and you will be charged at the 2lbs shipment weight. If your shipment actually weighs 1lb, the 2015 list rate for Standard Overnight Zone 6 is $49.50. With MBW your shipment will bump to 2lbs, and you will be charged at a list rate of $55.90—that’s over a 12% rate increase per package. If you put 1lb marketing material in a FedEx tube to send overnight to a trade show in Zone 6 you could see your gross cost increase in excess of 60%!
The logic of Minimum Billable weight changed in 2013 for FedEx Tubes—in 2012, Domestic shipments billed at a minimum 6lbs and International at 7lbs (Export only). Today, the logic is 7lbs and 9lbs respectively (9lbs now inclusive of Import-rated shipments). A lightweight International shipper moving a 1lb tube from the United States to Hong Kong, via International Economy, will see the base rate more than double ($76.19 1lb base rate now billed $170.59 at 9lbs). At 7lbs we would have seen the mark up to $159.64—just moving the scale two pounds creates a base increase of nearly 7%.
The logic for FedEx boxes changed as well. The minimum billable weight of 2lbs remains consistent, but the applicable services and sizes changed. In 2012, we saw MBW of 2lbs applied to the Small, Medium, and Large boxes for U.S. and U.S. Export shipments. Today, the 2lbs round up on FedEx boxes includes the Extra Large box and U.S. Import-rated shipments.
So what can you do—can you do anything? Yes, you can. Billed weight reflects package density. How much your package actually weighs versus how much space it is occupies. We see costs reflect the size of the box instead of the weight of the commodity. Minimum Billable Weight is a negotiable surcharge, similar to Dimensional Weight. We want to get the billed weight closer to actual so we need to change the variable creating the increase.
Be familiar with your discounts at the minimum billable weights. Too often we negotiate aggressively at our actual weights when we should be targeting our billed weights. If your 1lb package automatically bills at a minimum 9lbs, nine pounds is now your target weight break for any negotiations.
We can also look at FedEx One Rate. One Rate is not “one size fits all” for Air shippers—One Rate pricing is a considerable alternative for anyone with Standard Overnight Base, Retail, or account specific rates. So if you are shipping that Standard Overnight package to Zone 6, as we mentioned above, and seeing a 12% increase on your list rate, FedEx One Rate could provide some welcome rate consistency. One Rate is inclusive of residential, delivery area, and fuel surcharges so you can get a pretty good sense of your immediate cost. The base rate from our previous example became $55.90, not including any negotiated discounts and/or applicable fees, fuel, or minimums. With One Rate, the Small Box, including fuel, residential, and delivery area surcharges, costs $56.25. Your FedEx One Rate volume counts toward your Earned Discount and qualifies for Money Back Guarantee. Pick your box size, pick your service, and see your rate.