Have you noticed an increase in your shipping costs recently? At the start of 2015, UPS and FedEx implemented a new pricing technique for all commercial freight (air and ground) known as Dimensional weight or DIM weight. Moving forward in 2015, packages will be subject to these DIM weight measurements, along with the potential for increased cost. This model has benefitted the carriers with historic shipping volumes, bringing this increased cost and a decrease in per package density. It is important for shippers to properly understand existing packaging characteristics and the potential impact this will have. Implementing a proactive plan to mitigate any shipping increases will be key for many businesses.
DIM weight is calculated as (Length x Width x Height) / 139 (Dimensional Factor). The accepted standard shipping factor (Dimensional Factor) is 13. The price of shipping a package is now determined by either the actual weight or dimensional weight of a package, whichever cost is greater. The types of packages most affected by this change are large, lightweight packages. In fact, it is now possible for a 1 lb. package to be billed as if it has an actual weight of over 10 lbs! Many carriers, such as UPS, FedEx, DHL, and their subsidiaries, have calculators available on their website to assist you in calculating exactly how much your shipping with cost.
So, what can you do about it? If possible, create a spreadsheet that compares the DIM Weight to the actual weight of each package. Focus on your shipping mix and packaging materials that might have the most impact and remember that you’re not alone in this. Piedmont National has an experienced sales team ready to answer your questions and make recommendations for cost savings. Contact us today to schedule a meeting.