How to Strategize for the Increase in DIM Weight Shipping Costs

The recent announcement by UPS and FedEx that the dimensional (DIM) weight factor would be changing from 166 to 139 means that certain packages will soon cost more to ship.

Introduced simultaneously by UPS and FedEx back in 2015, DIM weight bases the cost of shipping a package on the item’s volume (the amount of space it takes up on a truck) and not just its physical weight. The latest adjustment is a continuation of a trend in which the dimensional divisor has dropped from 194 to 166 to 139.

In an earlier blog, my colleague, Greg Pollard, offered several options for mitigating the increased cost of this change, one of which was to consider adding a smaller carton size to reduce the dimensional weight of a package.  Clearly, this is a viable option, however, there are additional aspects to consider to lessen the impact of dimensional weight calculations on your business’ shipping costs.

In the short term, identifying one or two actions which can be quickly and easily implemented—perhaps adding a smaller carton size or changing the size of an existing carton will provide some relief. The best solution however, is to consider a longer-term solution, which could include an in-depth review of all packaging materials and methods with every option considered with equal objectivity. It’s more important than ever to revisit the entire packaging process and clearly identify the impact of all packaging components—carton, void fill, and cushioning material—on the actual shipping cost of a package.

The transition to costing based on package size/volume creates a new opportunity to analyze both packaging methods and materials. Each packaging component carries a specific function. The question to ask is “how important is this function?”  Perhaps another way to look at it is to consider alternate materials which will serve the purpose but, with less volume or bulk.

Typically, companies believe that it is more cost-effective to purchase fewer cartons in larger volumes, adding void fill to stabilize and protect those items which don’t quite fit in a carton. While this minimizes the number of cartons a company purchases, it also has significant impact on the cost of shipping in a world where the carriers are focused on cube rather than weight in determining freight rates. 

Continuing down the path of a “one size fits all” approach to product packaging is a guarantee of higher than necessary shipping costs in the future.  The prospect of a full-scale packaging review can be daunting; however, these efforts will likely pay off in substantially reduced shipping costs, offsetting the possibility of slightly higher costs of packaging materials.

Clearly, the change in DIM weight factors will increase shipping costs of many of the packages we ship. That change is coming and we can do nothing to prevent it. What we can do is minimize the impact the change has on our business and on our overall shipping costs by addressing one of the key factors that impact shipping costs. If your company doesn’t have the internal resources to make this happen, consider engaging a third party to assist your organization.

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