Did you ever pay more for a lightweight package than a heavy one?
One of the reasons for the hike in shipping prices is the DIM factor. The size and shape of packages occupy space in a shipping carrier’s vehicle. Many shipping carriers calculate the shipping rates based on the dimensional weight due to scarce spaces on their trucks. Thus, the dimensions of a package are essential during shipments. So, what are dimensional weight and DIM factor- these phrases are explained in this article. Also, we discuss the implication of the DIM factor in carrier contract negotiations.
DIM factor
It is a number set by shipping carriers for the shipment volume per unit of weight. It is the DIM divisor. The calculation of the DIM factor is on the maximum cubic inches per pound of a parcel. It is a factor in calculating the shipping price. Every shipping carrier has its DIM factor, which can change annually.
The DIM factor varies depending on the service offered by the shipping carriers. In addition, the mode of transportation affects the DIM factor value. Further, for some shipping carriers, international shipments have a different DIM factor from domestic shipments. For instance, UPS DIM factor for UPS® Air Freight Premium Direct is 139, and UPS Air Freight Direct is 166. When negotiating a contract with shipping carriers, businesses negotiate for a lower (its higher) DIM factor to reduce shipping costs.
What is Dimensional weight?
The dimensional weight of packages is vital for calculating shipping costs. The dimensions of a package occupy space when compared to its actual weight. For example, a lightweight clothes box may occupy more space than a compact steel box. A mathematical formula helps in calculating the dimensional weight.
Dimensional weight = length x width x height of the box/ DIM factor
If the DIM factor is high, the dimensional weight is low. Dimensional weight depends on the weight and size of the package. Hence, businesses must optimize their packaging options during shipping. If the dimensional weight exceeds the actual weight, shipping carriers may charge based on the dimensional weight. Further, to make better decisions, shippers should also know the difference between the Actual and billable weight to save money.
Actual Weight and Billable Weight
Actual weight is the package weight on a weighing scale. Irrespective of the size and volume, actual weight is the physical weight used by shipping carriers while calculating the shipping costs.
Billable weight is the weight that shipping carriers put on the shipping bills. Its calculation by the parcel carriers involves comparing the DIM weight and the actual weight. The parcel carriers use the higher value of the two weights. Billable weight varies for each parcel carrier and service.
Impact of the DIM factor on shipping costs
Shippers review their packaging strategies when shipping lightweight, large boxes. Different packaging designs and materials will give a better customer experience and save money with minimal changes. Customized boxes or poly mailers help companies reduce their shipping expenses. Advanced cartonization and streamlining the packaging processes can lower shipping costs.
Partnering with shipping experts allows shippers to ship their packages efficiently and lower shipping costs. 3PLs can also help negotiate lower shipping rates even for packages with higher DIM weights. Further, FedEx has packaging design consultants that help shippers to pack efficiently and prevent damage to goods.
Audintel advises its clients to negotiate on the DIM factor when signing contracts with shipping carriers.
DIM factor in Carrier contract negotiations
During carrier contract negotiations, shipping carriers have their shipping analytics to understand a company’s shipping profile. And shippers require to have detailed shipping data at their fingertips when negotiating with shipping carriers. Though shipping carriers have standard DIM factors for services, shippers can negotiate for lower DIM charges. Businesses can also ask for volume-based pricing of packages, which may be cheaper to send small parcels of less than 20 pounds. Further, shippers need to seek dimensional weight waivers or bargain for discounts on the Dimensional weight of packages.
To get the best out of the contract negotiations with FedEx or UPS, partnering with Audintel gives information about ways to negotiate the DIM charges. We help in optimizing the Dimensional weight of packages and lower shipping costs. Our team keeps track of DIM factor changes so that shippers can negotiate better with the relevant data. Audintel’s software tools help our clients bag the best deals by negotiating discounts with parcel carriers.
Finally
Companies must enter into contracts with shipping carriers to manage their shipping expenses. Understanding Dimensional weight charges and negotiating for lower rates requires shippers to have information on real-time data. Partnering with Audintel allows companies to bargain effectively on Dimensional weight charges with parcel carriers. With good negotiated contracts with parcel carriers, our clients can give the best price to customers and improve their profits. Contact us at +1 (619) 354 8539 or visit our Audintel website for further information about DIM factor and Dimensional weight.