Shipping technology has advanced greatly, helping businesses balance cost efficiency with meeting tight delivery timelines. However, one key factor that often impacts shipping rates is freight density. If you've ever been puzzled by dimensional pricing (DIM pricing), you're not alone. Many shippers struggle with it, especially regarding high-value items that take up a lot of space.
Understanding how DIM pricing works — and how to use it to your advantage — can make a big difference in managing your shipping costs. But it’s not just about the formula. Knowing how DIM pricing ties into other aspects of logistics, like proof of delivery (POD) and planning strategies, helps you stay ahead of the curve.
Let’s dig in.
Data and demand for freight density
Industry leaders are already taking steps to eliminate common disruptions in the freight process. According to Transport Topics, Freight Logistics Optimization Works (FLOW) is an excellent example of industry-wide data sharing. It uses forecasting to reduce issues like freight congestion and improves access to broad data for individual companies.
On the dimensional side of the conversation, FLOW could help shippers better understand packaging trends and factors impacting costs. When combined with smart planning, these strategies can keep your logistics running smoothly. Now, let’s get into the grit of how to calculate freight density.
What is freight density and how is it calculated?
Freight density is the area a shipment takes up relative to weight (pound per cubic unit). The weight is divided by volume, and that plays into the exact costs of LTL freight and freight classification, too. A lower-density product can take up more space, driving up the cost and potentially shifting class.
Take the density of oxygen, for example. Oxygen can take up any space as a gas but weighs very little per gallon, but if the oxygen were in a liquid state, the weight increases. In logistics, some shipments could be large, low-density items like packaging products or high-density like sheet metal, bulk grains, or heavy machinery in industrial manufacturing. The shipments have unique sizes and shapes and varying weights. But at the end of the day, it’s the weight compared to the volume that impacts shipping costs most.
Why? Regardless of total weight, carriers bill based on the weight and volume used in the trailer.
An object's density is calculated by taking its weight and then dividing that weight by its cubic inches (or feet), depending on the units used. Most often, the density is measured in weight per cubic inch to determine the total cubic feet and is categorized into a specific classification before the loading begins. The goal is to ensure the shipment's weight matches the truckload's space utilization.
The other side of the conversation is that density-based pricing can often become an issue with oversized shipments, resulting in incorrect freight classification and higher costs. Sometimes, these costs may not be justified, and a chargeback against a carrier may be warranted.
IL2000 had a similar situation occur in the past where we were able to help a heavy materials manufacturer get the right class assigned for their shipments.
DIM pricing: How does it impact shipping rates?
The dimensional weight is a factor that carriers have applied to ensure that low-weight items that take considerable space are billed competitively to those with a higher weight but lower volume need.
DIM pricing is a method used by carriers relying more on space consumption versus weight and applies to low-density freight.
The formula for density is typically the weight divided by the cubic volume, but in DIM weight, carriers apply a DIM factor as the divisor rather than the actual dimensions of the shipment.
At the end of both calculations, the higher weight density, whether actual density or the density calculated with a DIM factor, is the one the carrier uses for billing. Higher freight densities sometimes can escape DIM weight comparisons when the weight is obviously higher than any potential volumetric weight. A load of bricks is inherently more dense than a load of potato chips. Regardless, shippers need precise numbers for accurate freight classification and to avoid unnecessary charges.
If shippers do not consider dimensional weight, they risk not paying enough to cover the shipment or underestimating shipping costs, which can reduce profits.
Calculating density accurately is important for all shipments because errors can lead to shipment delays and billing errors.
Knowledge of density, pricing, and shipping rates
Density and pricing affect rates for LTL (less-than-truckload) and truckload. Knowing the impact of DIM weight, how to utilize it, and how to calculate your freight density will help avoid unexpected charges and make planning easier in the pre-loading stages.
When shipping larger loads or heavy machinery, using the correct tools to calculate the volume and determine the density gives the shipper better control over the logistics scenarios. There are no shortcuts to the formula or figuring out the object's volume, and it is best to utilize the tools one hundred percent of the time to avoid human errors. At the end of the day, the rate you pay depends on how much space is used efficiently on the truck and trailer.
Gain control over logistics and DIM pricing with IL2000
Navigating the complexities of dim pricing in shipping and logistics can be challenging, especially with ever-evolving technology. That’s where IL2000 comes in. With the right tools, expertise, and hands-on support, we help shippers overcome the hurdles of planning and managing DIM pricing. From freight audits to business intelligence, our tailored services are designed to keep your operations running smoothly and efficiently.
Whether you’re looking to reduce costs, improve delivery accuracy, or streamline your transportation management based on shipping volume and weight, our team-centered approach has you covered. Ready to take control of your logistics and get ahead of the competition?
Connect with IL2000 to get started today.