A DIM Future for Packaging

Excerpt from Inbound Logistics | By: Kevin Fletcher | January 2015

Trying to wrap your head around Dimensional (DIM)Weight Pricing and how it affects your shipping and logistics operations? Asked and answered! Here’s some expert advice on understanding the new models, and how to mitigate the costs.

What is Dimensional (DIM) Weight Pricing?

Dimensional Weight Pricing utilizes a formula to calculate the minimum billable weight based on a package’s cubic volume. You can calculate DIM for your parcel by multiplying length-in-inches by width by height, and dividing the product by a DIM factor. For FedEx and UPS, that DIM factor is 166 for domestic shipments.

{Photo Source: Depositphotos.com/eskaylim}

What can I do to catch up?

Don’t panic, but don’t hesitate. Start with a parcel analysis to see how many of your shipments are smaller than three cubic feet, and concentrate on making changes in that segment. Here are some initial steps to take:

• Be more efficient with your packaging. Train your employees to find the most cost-effective boxes and packaging for each shipment, and have different options on hand. It’s no longer “one size fits all.”
• Compare and optimize carriers. Shop around, and select carriers that offer the best pricing options for your commonly shipped sizes.
• Track small packages. Where are most of your smaller boxes being delivered? Could you group them into larger shipments to a regional center, and have them delivered by local carriers who charge less?

I ship in big volumes, so how will DIM affect me?

You can take advantage of the economies of less-than-truckload (LTL) by adopting a consolidation/deconsolidation program that focuses your volume shipments in the most cost-effective mode. One such strategy is zone skipping, where you bypass the parcel carrier’s traditional “zones.” This is accomplished by utilizing LTL carriers to transport shipments to the parcel carrier’s hub in the destination state or region. The parcel carrier then unpacks the load, and delivers the individual parcels to their final destination.