3 Ways Package Dimensions Affect Your Shipping Costs
You’ve heard the phrase, “Give them an inch and they’ll take a mile.”
What about, “Give your carrier an inch and they’ll take a bunch more money.”?
Now that one doesn’t roll off the tongue quite as well, but it’s certainly true. Many shippers underestimate the effects of their package dimensions on their final bill. It’s no wonder — no one ever said decoding a carrier guide was easy.
We hear from clients all the time who are flummoxed by all the costs around package dimensions, so let’s explain a few.
Dimensional (DIM) weight
Dimensional (or DIM) weight relates to the amount of space a package will take up rather than how heavy it is. There’s a formula carriers use to calculate DIM weight, and it’s readily available to shippers:
(L x W x H) / DIM divisor
The DIM divisor for 2020 with both UPS and FedEx is 139, so a 12x12x12 box will have a dimensional weight of 13 pounds, rounded up from 12.4. (Carriers always round weights up.)
But like your mom always told you, it’s what’s inside that matters. Is this a shipment of cotton balls or batteries? You might think that if you sell lighter items, your shipping cost will be lower. If only! A package’s billable weight will be the greater of its actual or DIM weight.
When it comes to DIM weight, every inch matters. Increase the size of that 12x12x12 box to 14x14x14 and the weight goes up to 20 pounds. This makes it extremely important to choose the right packaging for your items.
Additional handling surcharge based on dimensions
A lot of shippers we talk to confuse this surcharge with the DIM weight. But it’s entirely separate. While the Additional Handling surcharge can be applied for many reasons, shippers often don’t realize that dimensions can trigger it too.
Both UPS and FedEx charge $15 extra for packages require extra handling based on their dimensions. Any package that’s more than 48” on the longest side or more than 30” on the second-longest side will trigger this surcharge from both carriers.
If your package is heavier than 50 pounds, the surcharge will be based on its weight instead, adding $24. You will not be charged Additional Handling surcharges based on both weight and dimensions for the same package — just whichever is higher.
Oversize/Large Package surcharge
If you sell very large items, you probably assumed your shipping costs would be high. But do you know how high?
If your shipment triggers this surcharge, called Oversize by FedEx and Large Package by UPS, you’ll be paying quite a bit. Both UPS and FedEx tack on $100 for oversized commercial deliveries and $120 for oversized residential deliveries.
This surcharge can be especially confusing to shippers because it has a couple of layers to it and requires some calculation. For both carriers, this surcharge kicks in for packages larger than 96 inches in length or 130 inches in length and girth (two times the width plus two times the height of the package).
Beware! This surcharge also flips the switch on a minimum billable weight of 90 pounds, based on the larger of the actual rounded weight or DIM weight. If your package is oversized by its dimension but only 82 pounds, you’ll still be charged for 90 pounds of weight plus the Oversize/Large Package surcharge.
The good news is you won’t be charged for both the Oversize/Large Package surcharge and the Additional Handling surcharge — only the higher of the two.
What you can do about dimensional charges and surcharges
You sell what you sell, large or small, so it’s important to optimize your operations and your shipping practices to keep your budget in check.
- Make sure you’re using the right packaging. Review your packaging guidelines with your warehouse team to ensure they’re not using packaging that is unnecessarily large.
- Double-check your invoices. Sometimes the carrier determines your packaging to be larger than it is. Dispute charges that are incorrect.
- Negotiate. If your carrier invoices regularly reveal any of the charges or surcharges we’ve talked about here, work with your carrier rep to negotiate better terms around it in your next contract.
- Get a better handle on your data. Consider tools that help ensure you’re being charged correctly and helps you spot inefficiencies you can resolve to save money.
We all know shipping is complex, and dimensional package issues are just the tip of the iceberg. For more on other shipping missteps, check out our white paper, Five Big Shipping Mistakes Your Company Is Likely Making.