Today I’m discussing a topic that received a flurry of attention just over 6 months ago – Dimensional (DIM) weights. I know we’ve touched on the subject before, but for those of you who still have questions or have yet to evaluate how you can cut shipping costs on your current packaging, this post is for you.
Shipping Prices Pre – 2015
Prior to January 2015, FedEx and UPS billed only air, international and ground packages greater than three cubic feet at either the greater of their actual weight or their dimensional weight. Ground shipments under three cubic feet were all billed at their actual weight. However, with the explosion of e-commerce businesses and the frequency at which many of us are receiving our purchases by mail, both major parcel carriers have had to reconsider their pricing models – and for good reason. For years we’ve been shipping items in boxes and packages much larger than necessary for providing adequate protection. We were able to pay based only on what the box actually weighed, not its size, leaving little incentive to ship in a smaller package. The decrease in per package density due to improper package selection caused carrier vehicles to “cube out” before reaching their physical weight capacity. This inefficient method of shipping spurred both FedEx and UPS to eliminate the previous exemption for ground packages of less than three cubic feet. They built new delivery centers and retrofitted old ones with Enhanced Dimensional Weighing Systems to prepare for the change.
Shipping Prices Post – 2015
Since January 2015, all ground packages (regardless of their size) are now subject to the same DIM weight factor as their larger counterparts. This pricing model is more closely aligned with the cost factors of shipping – both weight and size. Yes, this means that the carriers are making more money, but it’s also a great motivator for us to be more conscientious of possible over-packaging.
How do Dimensional Weights Actually Work?
We’ve discussed the impact of DIM weights, but how do they actually work!?
Dimensional weight is determined by using the calculation: Length x Width x Height divided by the applicable dimensional factor. Unless a shipper’s agreement has negotiated a modified dimensional divisor, then UPS and FedEx both use 166 domestically and 139 internationally. Fractions of an inch greater than or equal to one-half inch are rounded up. Fractions less than one-half are rounded down. The dimensions used must be the outside dimensions. Be aware that some manufacturers quote inside dimensions. The cost applied when shipping will be the greater of either the package’s actual weight or dimensional weight. The SlideShare below walks you through a visual example of how to calculate DIM weight, and the financial implications of using a box vs. bag. It’s easy to see why it’d be advantageous to use the minimum amount of packaging with the new pricing model.
If you haven’t already done so, I would highly encourage everyone to perform a packaging audit on your current packaging methods. Are there ways to reduce your costs and minimize your footprint without danger of damaging your product during transit?
Are you currently using boxes? If so, is using a box absolutely necessary? Boxes are more expensive, tougher on the environment, and typically include extra costs for dunnage (such as air pillows) and tape. For recommendations on appropriate packaging for your product, take a look at my previous post “Confused about What Packaging is Best to Ship your Product in?” I hope I was able to shed some light on a high profile topic, and have encouraged you to take another look at packaging. If you’d like to hear what PAC Worldwide can provide for you, give us a call at 1.800.535.0039 or send us an email at [email protected]. We’d love to talk to you!