On January 1, 2015, Dimensional Weight Pricing (DIM Weight) was applied to all ground shipments smaller than three cubic feet by the major small package carriers as well as some LTL carriers. With the new pricing matrix, you are charged for the volume and weight of your package, rather than the weight and distance. This means that packages with filler and empty space will cost you more to ship.
What is Dimensional Weight Pricing?
Dimensional Weight Pricing is calculated by not only the package’s weight but also the
space it takes up. You can calculate your package’s dimensional weight by dividing the volume of a package by a DIM factor.
Dimensional Weight = (Length x Height x Width) / DIM Factor
That sounds easy enough, but on top of the DIM Weight, you need to know your package’s actual weight as well. This is because the higher of the two weights becomes the billable weight.
Your target is to make the dimensional weight equal or less than the actual weight. FedEx and UPS offer online tools to help you determine your DIM Weight. Be precise with your weight and measurements to avoid carrier rebills.
How Can DIM Weight Affect You?
Those who felt most of the impact are those shipping with outdated processes. According to Jack Ampuja, president of Supply Chain Optimizers, “Typical e-commerce shippers only utilize 60-percent cube efficiency, which means 40 percent of their capacity is either air or filler.” Shippers can minimize the impact of DIM Weight pricing by choosing the right box for the product size, eliminating void space and downsizing package size.
If you remember these key points, you can avoid high shipping rates with your DIM Weight:
- Make your package as small as possible: Pack as tightly as you can without making room for empty space. Use packing materials that do not expand or bulge.
- Don’t forget pallet efficiencies: Inefficiently stacked pallets with gaps will add to the shipping cost.
- Utilize group buying power: 3PL services, such as GTS, can negotiate with carriers and pass the savings on to you.
- Limit the shipment of high-volume, low-weight goods: The dimensional weight of high-volume; low-weight goods are much more than their actual weight. This makes them unprofitable to ship.
By using precise measurements, you will avoid paying more due to Dimensional Weight Pricing. Visit the GTS blog for more logistics insights.