A smart, successful retail strategy requires learning how to ship profitably – and nothing eats into profits quite like dimensional weight.
Keeping dim weight low is essential to healthy shipping and packaging costs, yet it’s a hazy area for many people… Now that it’s become a major consideration in ground shipping (after factoring into express shipping fees for years), it’s time to learn how to put your dim weight costs on a diet.
Calculating Dim Weight
So what exactly is dimensional weight? It’s no surprise that transport costs for your shipments are determined based on weight, but recently many carriers have begun doing a secondary calculation: dimensional weight, which factors in the length, width and height, along with the actual weight, of a package. In other words, dim weight represents package density.
Think of a large, lightweight package – a pair of pants in a relatively large cardboard box, for example. It weighs very little but unnecessarily takes up valuable air space in the carrier’s vehicle. And you’re probably getting charged accordingly.
Here’s how shipping carriers calculate dim weight:
- For domestic shipments, dim weight is (Length x Width x Height) divided by 166.
- If you’re shipping international, the sting’s even worse: (Length x Width x Height) divided by 139.
Carriers like FedEx and UPS compare the dim weight and actual weight, and charge you for whichever is higher.
As e-Commerce continues to grow, carriers must continue to invest in network capacity and drive smarter shipping behaviors. A way to deliver more packages within the existing capacity is, of course, to influence packaging selection – which is precisely what happens when they bill you for dimensional weight.
It Adds Up Fast
To understand the impact of dimensional weight charges over quantity and time, consider this standard 12” cube box.
Let’s say it’s going from New York City to Los Angeles. The actual weight of package contents is 3 pounds. However, its dim weight is 10.4 pounds, which – when rounded up according to the carrier’s rules – has a total billable shipping weight of 11 pounds.
As recently as 2014, before dim weight really caught on, this package would have shipped at the 3-pound rate. In 2015, it ships at the 11-pound rate. That’s quite a hefty difference, particularly when you start multiplying by quantity and factoring in various destinations.
The below shows the dollar impact of dim fees in the real world, based on FedEx retail rates as of 2015:
Source: published FedEx retail rates, 2015.
Note that nothing has changed about this package or its contents except how its weight is being calculated. Over the course of a year, those extra charges really start to add up.
How to Lose Dimensional Weight
For a customized strategy, it’s best to speak with a fulfillment provider about your specific needs – but here are our three top ways to lose the dim weight fees.
1) Rethink your packaging
For all the reasons above, it’s important to streamline your packaging as much as possible. The great news is that with so many packaging options available today, it’s possible to do so without sacrificing elements of branding and customer care. In fact, in many cases this need to rethink packaging is a win-win, resulting in sleeker, chicer packaging concepts along with smaller shipping costs.
Since the cost to ship a package is two to three times the cost of fulfillment, minimizing dim weight makes a lot of sense - the extra cost of new packaging/presentation will be more than offset by savings on shipping. So work with your fulfillment provider to determine a method of packaging that is functional as well as financially savvy.
For example: depending on the shipped product type, a good-looking polybag keeps orders thin, while protecting just as well as a box. Moreover, these bags are a lower-cost consumable product, increasing savings even further. Plus, they come in a vast array of branding options. (Stay tuned for a future post on more packaging options.)
Mack Weldon’s streamlined branded polybags
2) Get smarter about returns
Not only does dim weight impact your outbound costs, but it’s also a major factor in returns. If your policy allows the customer to use the original outbound packaging to place a return, especially when returns are free, dim fees become an even larger issue.
Let’s say the original order comprised of five items and the weight is billed with no dim charge. But the customer is returning just one of those items – the package is now dimmed. It’s dim weight likely to hit a higher percentage of returns parcels than order parcels, considering how to address from a returns standpoint is mission critical.
Talk to your fulfillment provider about better options, such as including a low-cost returns polybag with the outbound order. Or use a carrier that doesn’t charge dim fees (such see below) for returns. It’s no problem to have different carriers for outbound and returns deliveries.
3) Use alternate carriers
Another way to keep shipping costs low is to select a carrier that doesn’t charge dim fees like UPS and FedEx do. There are some great alternatives, from USPS to Newgistics – so work with your operations manager and/or logistics partner to find the carrier that’s best for your needs.
Dimensional weight needn’t weight you down! Consider tossing those unnecessarily bulky boxes, explore your options, and take back control of your shipping costs.