The problem is nearly an archetype-you tender your shipment of low-weight, high-volume product. Everything seems okay, but then you get a higher-than-expected bill from a carrier due to the dimensional weight of your LTL load. Your carefully crafted consolidation plan is now seemingly useless, and you aren't truly sure what happened. The answer lies in dimensional (DIM) pricing models.
Let's stroll through the world of DIM pricing and why it's truly among the most important factors in keeping your costs in check.
The challenges of DIM pricing
Understanding DIM pricing cannot be an afterthought. As the supply chain prioritized efficiency over past years, carriers began to think more strategically about the space on their trucks. Ergo, the need to consider shipments taking up more space on a truck should be paying more, right? If the shipment were a 10,000-pound piece of machinery that fit perfectly inside the width and length of a pallet, the higher cost seems obvious. But what if it doesn’t line up so perfectly, extending beyond the edges of a pallet due to design, like we saw first-hand with another client fix? Meanwhile, if the shipment was a 100-pound box of potato chips, taking up twice the space, the carrier still needs to make the best profit based on space. Both could technically take up the same amount of space, so who should pay more and why?
That's what a dimensional view does; it levels the playing field to focus on the actual space used in transit.
Dimensional weight pricing is a method freight carriers use to calculate shipping costs based on the cubic size of a package rather than its actual weight. This approach ensures that carriers make better use of space in their vehicles, increasing capacity utilization. Traditional weight-based pricing only considers the package's mass and acceleration on Earth due to gravity, ignoring how much space it occupies.
So physics aside, DIM pricing addresses this by applying a dimensional factor to the package measurements, creating a volume-based pricing model.
Carriers use what's known as a DIM factor to calculate weight, explains the NATDA. The exact factor may also vary by carrier, distance, and class, and it may be updated based on overall market conditions. You cannot assume that a DIM factor from years past will apply today. You should be actively checking the current pricing models to know exactly what the cost will be. But there are a few things you can do to ensure you're using the right weight pricing model for your shipment.
How to mitigate DIM pricing costs
Since DIM weight is all about ensuring the most consolidated and proper use of space available, calculating dimensional weight accurately is the first step in mitigating DIM pricing costs. The process involves measuring the package dimensions and applying the DIM factor. Measuring the package dimensions accurately is essential. Use the highest point on each side for accurate measurements. Ensure that the length, width, and height are measured correctly to avoid issues. Divide the cubic size in inches by the carrier's DIM factor to get the dimensional weight. Of course, this is pretty straightforward, so how can you help mitigate the costs associated with a volumetric weight?
Selecting the appropriate box size can minimize DIM weight charges. Avoid using oversized boxes for small items, as this increases the dimensional weight and, subsequently, the shipping costs. Instead, choose boxes that fit the items snugly without leaving excessive empty space.
That's not to say that you shouldn't add fillers or materials for certain types of freight--no one wants a bag of potato chip crumbs with a sandwich--minus those that crush chips to put on sandwiches anyway. Materials like bubble wrap and air pillows provide protection without significantly increasing the package's dimensions. Splitting shipments into multiple packages can sometimes be more economical. This approach reduces the overall cubic size and dimensional weight, lowering shipping fees. However, you must be mindful of the costs of booking multiple loads.
Another way to keep costs low is to realize that every carrier's published prices don't always consider the whole picture. A shipper moving thousands of loads may land a better price point with a carrier than moving the one-off load. Much like business development, it's about who you know and what opportunities they bring.
For example, IL2000 has a larger buying power than individual shippers. Thus, we're able to offer rates that may be unavailable with a do-it-yourself transportation management strategy.
Carrier-provided tools and resources can be invaluable in managing and reducing shipping costs, and they often have DIM pricing calculators on their sites. Let your fingers do the walking, and find out what the dimensional weight will be long before you tender your next load.
Give your fingers and mind a break on DIM costs by working with IL2000
There's no right or wrong way to book a load when the freight is urgent, but don't you deserve a chance to pay less? We say yes, and that's only possible if you recognize that you need two weights for every load--a dimensional and actual weight. IL2000 can help you with this by considering dimensional weights in conjunction with actual weights at the time of tendering within our TMS. Together, we can help you make sense of the different factors affecting transportation costs, so you can spend more time perfecting your potato chip sandwich.
Connect with an IL2000 team member to get started.