Don’t Lose Money: How to Deal with Dimensional Weight Pricing
Do you ship large items that are lightweight?
If yes, your shipping costs will be going up soon.
FedEx and UPS have announced that they are going to charge by dimensional weight for all FedEx Ground packages, UPS Ground Services, and UPS Standard to Canada packages. The new rates take effect on December 29, 2014, for UPS, and January 1, 2015, for FedEx.
Since dimensional weight isn’t a word most people use everyday, let’s put this in practical terms. When these changes go into effect, the cost to ship a large, lightweight pillow will cost the same or more than shipping a small, heavy box of rocks.
Here’s what you need to know to prepare for the upcoming changes:
What is dimensional weight?
Dimensional weight, also known as “DIM weight”, looks at the package’s volume. Said another way, dimensional weight is the amount of space a package occupies on a truck or a plane, rather than the package’s actual weight.
How is dimensional weight calculated?
To determine dimensional weight, you will measure the package’s length, width and height at its longest points and round up to the nearest whole number (1.50 to 1.99 is considered 2). Then, divide the total by a dimensional factor, which is 166 for UPS and FedEx domestic shipments and 139 for UPS and FedEx international shipments.
(image courtesy of UPS)
Here’s an example to help clear it up even further:
Shipping Method: Domestic Ground
Actual weight: 5 pounds
Length: 18 inches
Width: 10 inches
Height: 10 inches
Dimensional Weight Calculation: 18x10x10 / 166 = 10.8 dimensional weight
As you can see, the dimensional weight is greater than the actual weight of 5 pounds. So, the package will now be billed as an 11 pound package.
Why is the industry changing to dimensional weight?
This question can best be answered by the carriers. According to a UPS press release, “recent ecommerce shipping trends have resulted in a decrease in package density. This trend causes cargo space to be less efficiently utilized, resulting in an increased cost per package.”
They go on to say that, “The company believes that as a result of the dimensional weight pricing method, more shippers will seek to optimize their packaging practices. These efforts will reduce excess packaging materials and overall package sizes, leading to related reductions in fuel use, vehicle emissions and transportation costs.”
What can I do to save money?
- Reevaluate what you ship. Pay special attention to items that are large and lightweight. When possible, decrease the size of your shipping box. If you usually ship a 11x11x11 box that weighs 3 pounds (11x11x11 / 166 = 8 lbs dimensional weight), it will make a huge difference if you can decrease the box size by an inch or two (10x10x10 / 166 = 6 lbs dimensional weight).
- Reevaluate your FedEx and UPS contract. You can negotiate a shipping rate that is based on your shipping volume. The more you ship, the more you save.
- Reevaluate all of your shipping options. With the change to dimensional weight, you may discover that FedEx Ground or UPS Ground doesn’t fit your business model for your entire product line. Do your homework. Determine what the shipping costs will be for the items you ship, and research the best option for your online business.