DIMmed If You Do, DIMmed If You Don’t
Space or weight—pick your poison. That’s the lesson many parcel shippers have learned when trying to reduce their shipping costs to manageable levels and/or provide competitive shipping rates to their consumers. Many shippers don’t realize that they are being charged for either a package’s actual weight or a package’s dimensional weight—whichever is greater. Both space and weight come at a premium, and both require a deep level of data analysis in order to prevent them from negatively impacting a shipper’s parcel spend.
To understand why space and weight are so important to a parcel spend, it’s important to understand the DIM first. DIM refers to Dimensional Weight Pricing, a pricing technique that FedEx® and UPS® uses to calculate weight based on the carrier’s scanned dimensions (length, width, and height) of the package.
Just as a package’s size can have an unexpected weight when it comes to cost, the DIM can have an unexpected weight when it comes to overall parcel spend—a lesson shippers are quickly learning as they gain more access to data insights thanks to new technologies. As they have begun to process this new information, it’s become clear that no matter whether it’s due to package weight or size, you’re DIMmed if you do and DIMmed if you don’t.
FedEx Reports Record Peak Season VolumeIn its fiscal third quarter earnings report released March 21, FedEx announced record volume during its post-Thanksgiving peak. The quarter, which closed Feb. 28 and included December and January, encompassed most of that peak holiday season.
It’s a catch-22 of sorts—shippers end up paying for the amount of room a box takes up in a truck if the packages are light, but if they are heavy packages that take up less room on a truck, carrier rate tables dictate that heavier packages are shipped at a higher price.
With a system like this, shippers who use clam shell packaging can get hit hard because they pay for space on a truck that they aren’t even using. Often times, the carriers will stack other packages in the empty clamshell space, but the clamshell shipper is paying for that space. So shippers who ship small but heavy packages or shippers who ship clamshell packaging will often find themselves negatively impacted.
So if you’re DIMmed if you do and DIMmed if you don’t, the question then becomes—what can you actually do about it? The answer is to start with data. By utilizing technologies like the ones described above, shippers can begin to develop a deeper understanding of their shipping profile, allowing them to optimize the way they ship their packages so they can minimize those costs. It also allows for greater ability to negotiate fairer carrier contract negotiations, where the impacts of the DIM can be lessened—or at least managed.
Shippers don’t need to throw in the towel and accept that nothing can be done about the DIM. They just need to get smart about it—with careful data monitoring and analysis, and then by taking appropriate action.