FedEx is shaking up the shipping game in charging by package size

|About: FedEx Corporation (FDX)|By:, SA News Editor

FedEx (FDX) is changing the way it charges to ship bulky packages; instead of charging by weight alone, all ground packages soon will be priced according to size, which effectively will raise prices on more than a third of its U.S. ground shipments.

Such a move would greatly affect bulky but lighter weight items like toilet paper and diapers, but the changes also would profoundly affect Web retail shoppers, who often buy multiple clothing or footwear items - perhaps with free shipping - then keep what fits and return the rest.

For Amazon (AMZN) and other big online retailers, shipping is already one of the biggest and most rapidly increasing costs; e-commerce retailers likely would be affected by differing degrees, with the biggest companies such as Wal-Mart (WMT), Walgreen (WAG) and Saks (SKS) having advantages in their ability to negotiate pricing with FDX.

UPS has not yet followed FDX's move, but the two companies historically have matched each other's price increases.