[AT] It kind of blows my mind

[Grant Brians]

On 1/3/2016 1:54 PM, jtchall at nc.rr.com wrote:
> Wife wanted a $130  3ft tall filing/storage cabinet for her crafting area
> from Ikea. They wanted $299 to ship it--over the phone and internet. Said
> all 30 lbs of it had to go truck delivery. And it would be delivered on a
> Saturday. If I were a rich man I would have ordered it and told the truck
> driver he could tote it up the driveway, drive in without messing up my
> grass, or I would have refused delivery. I tried to get it shipped some
> other way--they wouldn't here of it. BUT I could get it delivered to the
> nearest store 3 hours away for FREE.
>
> John Hall
>
>
> -----Original Message-----
> From: Indiana Robinson
> Sent: Sunday, January 03, 2016 9:51 AM
> To: at at lists.antique-tractor.com
> Subject: [AT] It kind of blows my mind
>
> That a plastic gas can runs about $8 but a replacement spout for one is
> over $9.
> A new 1-7/8ths trailer coupler is under $10 but a repair kit for one is
> over $14...
> At Wally World a 12" trailer tire on a 5 hole wheel is about 20% less than
> the same tire on a 4 hole wheel.
> ?????????????????
>
>
Sadly, I know why Ikea priced the shipping the way they did. When UPS, 
FedEx and the shipping companies implemented "volumetric pricing" it 
changed the world of shipping charges. Previously if it weighed 11 
pounds or 5 kilos, then the charge was for 11 pounds or 5 kilos. Now, if 
the item takes up more than X space, there is a minimum charge for the 
space and actually for some applications there will be an upcharge from 
that number too. As soon as you look at a low weight, high cubic volume 
item such as that filing cabinet, then Ikea's shipping pricing software 
was tagged to force truck shipment.
      Even though the total volume is not huge and could go either way, 
my guess is that they tagged it that way because they had too many 
claims for damage to packaging and merchandise for filing cabinets 
shipped by the box carriers also. I know that when I worked in big 
companies in the past, when they got new filing cabinets delivered they 
almost always had a cosmetic damage occurrence on them if the vendor did 
not pallet them....
      On the other hand, delivery to the store would occur in a pallet 
quantity, restocking the item in a truckload delivery paid for by the 
department that restocks the store. It would cost almost as much to 
break that cost out as a profit center as to not charge. Additionally, 
they probably already had the item in that store anyway and the 
incremental sale cost literally nothing to the company.
      This phenomenon is why when I buy the seed for the vegetable and 
flower seed business I have to combine orders as much as possible. If I 
get my Italian seed in a container and it has three pallets the cost is 
similar to if I could just get three pallets shipped separately to me. 
On the other hand the only cost increase for a full container is the 
tariffs on the additional products. This means that the shipping cost 
for a full container per pound is roughly 1/7 to 1/10 the cost for three 
pallets and 1/10 to 1/15th for one pallet by sea.... But if I were 
shipping mostly air, then the cost per pound would be huge!
      Relating this to farm machinery, when I shipped a Killefer (John 
Deere manufactured in Los Angeles,California) Tumblebug earthmover to a 
list member in Georgia 12 years ago on a pallet, despite its low weight 
- maybe 1100 pounds - thanks to a low freight classification and no 
volumetric pricing it only cost $300 to ship from my farm in California 
to him. Today with volumetric pricing, even if the freight class and 
shipping cost had not changed, the cost would have been 3 times the 
price because that one pallet size was only the part that touched the 
floor of the trailer, the actual length was ten feet, occupying by the 
newer system 3 pallet spaces! In reality what the transportation company 
did was to put the tongue over other pallets and not occupy more space. 
But the charge now would be for the extra volume.
      This is not just a US phenomenon, it is also in Canada, Mexico, 
Europe and maybe worldwide.
                Grant Brians - Hollister,California farmer of 
vegetables, herbs, edible flowers, nuts and fruit and seed sales