Thinking in Dimensional Weight
EchoData Reduces Shipping Costs with Proven Strategies
It’s been over a year since UPS and FedEx began rating Ground packages on the dimensional weight of the shipment. In the past this honor was reserved for oversized shipments, express and other specialty service categories.
How Dimensional Pricing Works
The three major carriers (FedEx, UPS & USPS) have all adopted dimensional weight pricing. While FedEx and UPS now use DIM rates for all ground shipments, USPS is selective in its use of DIM pricing based on shipping zone, weight and parcel dimensions.
DIM weight pricing is calculated by multiplying the L x W x H of the package, if it is less than 1728 cubic inches it is divided by 166. If it is greater than 1728 cubic inches the new divisor is 139 (new in 2017) for FedEx/UPS. This result is compared to the actual weight and the greater of the two is used for the final shipment weight. As with typical Ground services, this figure is rounded up to the next pound (i.e. a package that is 1.2 pounds will be charged at the 2 lbs.).
UPS / FedEx Calculator:
USPS only charges dimensional weight for packages that are over 1 cubic foot (12 x 12 x 12) and shipped to zones 5-8. There are also no dimensional weight charges when an item in zones 1-4 is less than 84″ in girth (i.e. L + 2x width + 2x height).
Broad Impact of Dimensional Pricing
While it’s difficult to determine the exact monetary impact, industry experts have made predictions of $500 million to $1 billion dollar increase in annual shipping rates. Costs have increased an average of 20 to 30 percent for more than 70 percent of all ground shipments.
How EchoData Tackles DIM Charges
Many companies face pressure to reduce shipping costs without incurring additional overhead costs in the areas of labor, product and technology. As an experienced fulfillment provider, EchoData deploys numerous strategies to reduce its clients shipping rates.
Don’t Get Boxed In
Because DIM pricing is largely dependent on the size of the parcel relative to its weight, EchoData offers to evaluate our customers’ current packaging to determine where DIM may be affecting cost. Since volume is a key driver of DIM weight, EchoData works with clients in the following areas:
- Replace unnecessary boxes with padded mailers, particularly for small items
- Evaluate current packaging and identify correct sized boxes for clients’ shipments
- Consult on alternatives such as lighter but stronger boxes, reducing the need for packing materials, which add space and cost
- Carrier optimization for better decision making based on weight class, destination and delivery date
The EchoData Advantage
With our ability to maximize carrier relationships, employ advanced technology and optimize packaging strategies, EchoData can offer your business a competitive advantage and lower your costs. If you are in the market for an experienced, scalable fulfillment partner contact EchoData to discuss your business objectives. We’ve been supporting the needs of the fulfillment and supply chain industry since 1983. Visit us at www.echodata.com or give us a call at 800.511.3870.
Posted February 24, 2016