Since January, FedEx, UPS and others in the shipping world have broadened their use of dimensional (DIM) weight pricing, eliminating the exemption for packages measuring less than three cubic feet and making DIMs the standard pricing model for most shipments.
DIM pricing is determined by a formula that factors the size as well as the weight of a shipment, in most cases amounting to a price hike without any changes to the service being delivered. As calculated by The Savvy Shipper, a woman’s shoulder bag with the dimensions 19x15x5 which has an actual weight of two pounds would have a DIM weight of nine pounds, increasing the shipping price by 28.3%. A video game controller with the dimensions 12x8x8 with an actual weight of one pound would have a DIM weight of five pounds, increasing the shipping price by 29.7%.
According to a new report from Sealed Air, DIM pricing “could have major financial implications for unprepared manufacturers and retailers.” Companies that don’t optimize their packaging to account for DIM weight pricing could be paying up to $550 million more per year in shipping costs.
The good news is, there are ways to offset these costs. Here are some things to consider when reevaluating your operations to account for the changes brought on by DIM pricing:
- Don’t put all your eggs in one basket. Consider diversifying shipments and/or returns with a provider that does not charge for dimensional weight to offset the costs associated with a national carrier.
- Educate your team so they’re aware of this price change and train them on ways to minimize the impact (box selection, packing techniques, etc.).
- Require transparency in billing from your carrier to avoid costly mistakes.
- Look for additional ways to offset additional shipping costs. Consider reconfiguring shipping lanes for greater efficiency, or explore ways that returns can become a profit center with tactful marketing.
As you take this new reality in stride and readjust to this new normal, considering strategies such as these will ensure you maintain the competitive edge.