We’ve all heard of dressing for success, but when it comes to shipping, packing for success may go way beyond style. With space on trucks at a premium due to increased parcel shipments leading to a capacity crunch, parcel and LTL carriers have responded by expanding dimensional-based (DIM) rating policies.
To make matters worse, shipping costs are rising at twice the rate of inflation, making it more important than ever to pack orders in the most cost-effective way possible to avoid any unnecessary DIM fees.
The DIM Lowdown
Carriers use DIM weight rating to determine shipping costs based on weight, distance, and carton size instead of just weight and distance being shipped. DIM weight is calculated using a formula that multiplies the length, width, and height of a package and then divides the total by the “dimensional weight divisor,” “DIM divisor,” or “DIM factor.”
Too often, shippers have relied on rules-of-thumb or guesses to come up with the shipping costs shown in shopping carts and other areas. This risks impacting the prices you are paying to ship items, but can also impact the customer’s experience as well.
Here are three of the most common mistakes shippers make when trying to figure out DIM rates on their own:
Too Big
Look in almost any mailbox or front porch, and you will probably find a package stuffed with excess packaging material around an item that could fit snugly in a carton half its size. This choice of picking a box that is too large can greatly impact DIM fees as carriers are tired of shipping air. Beyond the added costs, there are additional issues from wasted materials, environmental impact, and damaged items, leading to unhappy customers, and reduced referrals and repeat business.
Overcompensation
One reaction a shipper may have to the DIM rating challenge is to overreact. Using cartons that are too small can result in higher costs than may have been realized because each box has a minimum cost associated with it. At times, shippers will save money by shipping a package filled with air that carries a higher DIM fee than shipping multiple small boxes. The challenge, though, is figuring out the best way to ship and estimating shipping charges early in the process.
Not Shopping Around
As with carrier rates, shopping around can help find you the lowest DIM rate. Carrier DIM weight shopping takes into account and compares the different rates and DIM factors for multiple carrier services. This can be time-consuming without the correct technology in place to speed the process.
As the demand for parcel shipments continues to grow, and more customers expect free or low-cost shipping, the time for guesswork has passed and the time for a cost-effective cartonization process is here.
For more than 25 years, Bob Malley has helped thousands of businesses reduce transportation costs and streamline fulfillment with parcel TMS technology. As founder of Tracer Research, Inc., and later as Kewill CEO, Bob introduced Clippership, one of the first integrated multi-carrier shipping systems. As managing director of Pierbridge, Bob has built a global organization that continues to innovate Transtream, an enterprise-class parcel TMS platform. Pierbridge and its technology partners, Logistyx and Pitney Bowes, have achieved FedEx Compatible Platinum certification. Pierbridge has also earned UPS ConnectShip Platinum certification status. Now part of the WiseTech Global group, Pierbridge is rapidly expanding and driving deeper into global e-commerce fulfillment.
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