Vast amounts of money are wasted each year shipping air in corrugated boxes. Even two years after major commercial shippers implemented game-changing “dimensional weight pricing” across the board, many companies still inexplicably ship products in oversized boxes.
What? You say? Most consumers, particularly those not in the freight or e-commerce business, likely have never heard of dimensional weight pricing, but they probably are starting to notice the boxes coming from Amazon and other online merchants filled with less “packing material.” That’s because many of the items they’re buying online are close to the size of the container they’re shipped in.
For those who may not fully understand dimensional weight pricing, it’s basically this: Before dimensional weight pricing, you could ship a brick in a microwave-sized box and another in a brick-shaped box for basically the same price. That’s because freight costs were mostly calculated on weight, not size.
Put another way, “dimensional weight is a pricing technique used by the transportation industry that measures the amount of space a package occupies compared to the actual weight to determine billable weight,” according to National Fulfillment Services (NFS).
UPS representatives told Small Business Trends that U.S. DIM weights are essentially calculated by multiplying the container’s length by height by width and dividing by 166 if the result is greater than 5,184. The billable weight would then be the greater of the DIM weight or the box and its content’s actual scale weight, according to Small Business Trends.
The reasons for the change weren’t as simple as most thought. Some said the freight industry did it to cut down on fuel costs, which doesn’t entirely make sense because DIM pricing would lead to more products of identical weight in each truckload. Others held DIM made shipping more efficient, which is indisputable.
While retailers and wholesalers didn’t embrace the new pricing methodology at first, it didn’t take long for most to understand how wasteful prior practices were. Yet today, many companies still are paying good money to ship air, as well as the additional weight for things like the air pillows and foam pellets used to fill the void inside corrugated boxes and other containers. It adds up. Big time.
Dealing with DIM
There are several steps you can take.
National Fulfillment Services offers a few tips, including consolidating your shipments with carriers to leverage the greater volume and gain better pricing. Regional providers or consolidators are another option, according to NFS.
Most importantly, implement right-sized packaging. Yes, there’s always a need for padding materials, but choose boxes that most closely resemble the dimensions of the content you’re shipping. The best solution is custom packaging, which virtually eliminates costly dead space (air).