While parcel dimensional weight and pricing have become standard practice in the shipping industry, the changes and increases in DIM charges are increasingly becoming a factor of concern for many shippers and their bottom line.
To some who may not be as familiar, DIM can appear to be just another way for carriers to squeeze more money out of shippers. However, DIM weight pricing can be advantageous and an overall simpler approach to calculating the cost of your packages with the carrier of your choice.
What is DIM Weight?
Dimensional weight reflects package density, which is the amount of space a package occupies in relation to its actual weight. A recent article in Cerasis defines parcel dimensional weight as the calculation of a package’s “volumized” weight, otherwise known as its cubic weight. The motivation behind the implementation of DIM weight came as a result of lost opportunities for carriers derived from shippers sending low-weight packages in big bulky boxes with excess packing. Therefore, carriers calculate the volume of a shipment and divide it by a parcel dimensional weight factor, which varies for each carrier.
As a shipper, you still want to know the package’s actual weight as the actual weight is compared to the DIM weight and the higher of the two is what the carrier will use when determining shipping costs.
Benefits of DIM Weight
The DIM weight model requires shippers to be more effective with how they package their own goods. By right-sizing your packaging, you can protect your items and potentially save money on shipping supplies and materials. Also, by making sure their packages take up as little space as possible, these businesses get better at planning and more accurately forecasting shipping budgets. With a simplification of shipping costs comes a simplified budget too.
As a shipper, it is wise to do your research to find the carrier that will partner with you on all of your needs and budgets. Each carrier will have different terms of service and options of billing. Also, each carrier’s dimensional weight divisor will vary.
To determine the dimensional weight, multiply the package length by the width by the height, in inches. The result is the cubic size of the package. For most National Carriers, the DIM weight divisor factor for domestic or ground shipments is 139. Regional Carrier OnTrac offers a dimensional weight factor of 166.
EXAMPLE: Using 10-inches for the width, 10 inches for the height and 10 inches for the length.
Changes to DIM Weight
Potentially one of the most impactful changes for 2018 comes with the announcement that FedEx will begin applying a dimensional weight (DIM) factor of 139 to all SmartPost packages, effective January 22, 2018. The change will align FedEx Express, Ground and SmartPost with that of UPS SurePost and UPS daily rates for all U.S. domestic services.
Looking at the chart below, furnished by PARCEL, while reviewing the examples shown, can help illustrate the impact of this change. Consider the following three SmartPost packages, all rated using the non-discounted FedEx SmartPost rates for Zone 5. The examples compare the 2017 non-dimensionalized rate to the 2018 dimensionalized rate.
The percentage cost increase is significant and illustrates how changes to DIM pricing are often more impactful than other changes. As it pertains to DIM Weight factors, this is one instance where greater is better. OnTrac offers a greater DIM weight divisor than national carriers, as well as, fewer fees and lower surcharges which can help keep costs in check and boost your bottom line.
Click HERE for further information on how OnTrac compares to the national carriers.