Reduce DIM Costs with Efficient Packaging

 In Industry News

Over the five years since UPS and FedEx first introduced DIM weight pricing for freight and ground shipping, the cost of this method of rating shipments has increased each year, and it’s something shippers can no longer afford to ignore. Compounding the problem is that it’s also increasingly difficult to pass off the extra cost onto customers, who now expect free or low-cost fast delivery by default.

Given that the annual rate increases of the two carrier giants have just gone into effect, this is a good time to look at how to mitigate the impact DIM has on your shipping costs. Below, we explain how packaging efficiencies help to reduce DIM costs.

First, let’s clarify what exactly DIM weight is and look at an example of its potential to exponentially increase your shipping costs.

How to calculate DIM weight

Dimensional weight (also referred to as DIM weight, volumetric weight, or cubed weight) is the relationship of shipping box size to the actual weight of the total package.

UPS and FedEx apply DIM weight pricing to ALL packages. To calculate the dimensional weight, both carriers divide the cubic size of the package by 139 (the divisor).

Here’s how to calculate the billable weight of a package that is to be shipped via FedEx or UPS.

1. Determine the actual weight

This is the package weight (on the scales) rounded up to the next whole pound.

2. Determine the dimensional weight

a) Determine the package dimensions in inches. For each dimension, measure at the longest point, rounding each measurement to the nearest whole number (for example, 1.00 to 1.49 will be considered 1, and 1.50 to 1.99 will be considered 2).

b) Multiply the package length (longest side of the package) by the width by the height. The sum is the cubic size in inches.

c) Divide the cubic size in inches by the divisor to calculate the dimensional weight in pounds. Increase any fraction to the next whole pound.

Dimensional Weight = (L x W x H) ÷ Divisor (139)

3. Determine the billable weight

Compare the package’s actual weight to its dimensional weight. The greater of the two is the billable weight and should be used to calculate the rate. For multiple-package shipments, total the billable weight of all packages in the shipment.

Example:

A package measuring L 53 x W 12 x H 26 = cubic size 16,536 in. ÷ 139 (divisor) = DIM weight 119 lbs.

Actual weight of package = 53 lbs.

DIM weight of package = 119 lbs.

Billable weight of package = 119 lbs.

As you can see, uncessarily over-sized or wasteful packaging can have costly consequences. So let’s take a look at how you can use efficient packaging to minimize the DIM weight of your shipments.

How to use efficient packaging to reduce DIM weight

Efficient packaging directly correlates to lower transportation costs.

The efficiency of packaging is related to how much filler and air is contained in the shipping case. One survey of leading fulfillment companies found that the average e-commerce shipping carton contains over 50% empty space, and that the potential for cost savings with efficient packaging could be in the range of 20% – 40%.

Here are some ways to increase the efficiency of your packaging.

Use appropriately sized boxes

Aim always to use the smallest box possible. Because DIM weight is cubic, trimming even fractions of an inch in each dimension can multiply to notable savings. Also take into account the protective materials. Could the item(s) be shipped without protection in the box, thus reducing both weight and package dimensions?

Optimize package contents

Ship as many items as possible in one box. With DIM pricing, it is not cost effective to ship a small item in an oversized box, or multiple items going to the same destination in separate boxes. The more items per box, the greater the cost efficiencies.

Evaluate the type of packaging

Is it necessary to use a box, or could the item(s) be sent in a padded envelope or Tyvek® or poly bag? These lightweight, low-volume options can reduce shipping costs.

Automate the optimization

Consider using an automated system that fits the box to the contents. These systems virtually eliminate any unused space and could pay for themselves in the long run. When combined with high-performance packaging or paper to fill small voids, custom boxes can also reduce the likelihood of damage in transit.

Automate the decision making

Automation can help by saving custom packaging dimensions along with the DIM weight information for faster matching of the right box with the right shipment.

Also available is software that allows you to save combinations of carrier services and packaging. These presets can then be applied when a shipment meets the criteria.

Consider using a third party

There are two ways a third-party packaging expert could help you.

1. A packaging expert can evaluate the packaging line and analyze parcels to determine if there’s wasted interior space. In addition, they can review your shipping data and give you the info you need to optimize box sizes to fit your most commonly shipped items while providing the necessary protection to prevent damage.

2. For the ultimate in automation and optimization, some packagers offer an on-demand service that links with your internal order system for automatic calculation and production of the optimal box size. With this system, every shipment receives a custom packaging solution.

Don’t penalize yourself: Give the carrier the DIM info

All the packaging optimization will not pay off if you get hit with a penalty for not providing the package dimensions to the carrier. Provision of package dimensions is now mandatory, and missing out this step could result in a 20% – 100% penalty, depending upon the actual dimensions of the package.

Long-run benefits for all

As we noted in an earlier blog post, reducing the packaging you use brings with it benefits even beyond reducing shipping costs by reducing DIM weight. It also reduces your packaging costs and the environmental impact of both the packaging and the shipping.

Over the long run, it benefits everyone.

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