New tank sending unit outlet size for a 340 motor

The 3/8" pickup is the upgraded pickup for higher performance. But you also need 3/8" line all the way to complete the upgrade. You can use it with your 5/16" line but it may be a problem getting them connected because rubber fuel hose is either 5/16 or 3/8 diameter. The 5/16 hose may not stretch over the 3/8 fitting and the 3/8 hose that fits the 3/8 pickup may not clamp down good enough to seal properly. If it were me I'd send it back and get the right pickup, or change the rest of the fuel line to match. Unless it's a very serious small block there's no need for a 3/8 line IMO