Control Shipping Costs by Eliminating Hidden Dimensional Rating “Gotcha’s”
Many freight carriers and logistics service providers have their own dimensioning systems to automatically measure package dim weights and calculate freight charges when the shipments reach their facilities.
However, recent announcements by FedEx and UPS to expand their dimensional rating programs make it more important than ever to ensure that you’re doing everything possible to eliminate operational oversights that can result in dimensional rating back charges.
Dimensional rating an area where seemingly minor differences in calculations can result in significant back charges from the carrier.
Discrepancies can occur for several reasons, including:
1. Actual carton measurement discrepancies: One of our customers found that the carton measurements they were using to calculate freight costs actually differed from the carrier’s measurements for the same cartons.
2. Carton shape: The volume used to calculate the dimensional weight may not be absolutely representative of the true volume of the package, depending on the shape of the package. The carrier will measure the longest dimension in each of the length, width and height and use these measurements to determine package volume. If the package is a right-angled box, this will be equal true package volume, but if it is any other shape, the volume calculation will be greater than the true volume of the package.
3. Data entry errors: For example, the shipping clerk processes a 20-pound package measuring 20” x 20” x 20” but forgets to add the dimensions. The resulting charge is $20.00. However, when the box reaches the carrier’s facility, its equipment picks up the dimensions and calculates the dimensional rate at $40.00. You will be billed back for the difference of $20.00. These errors, added up over a year’s time, can amount to thousands of dollars in back-charges.
4. Packing processes: Do not overpack orders – it can easily result in back charges. For example, you pack a carton so full that it causes the size to bulge and you report a 20 lb. carton at 20” x 20” x 20” for a freight charge of $40.00. However, the carton actually bulges out to 22” x 22” x 22”, so the carrier’s dimensional system calculates freight charge to be $45.00.
Best Practices to Eliminate Dimensional Rating Back Charges
√ Consider adding a dimensioning system. There are a variety of dimensional systems available to accommodate a wide range of operations. If you’re not sure if it fits your needs or where to start, our system specialists can help you determine a configuration that is best for your fulfillment environment.
√ Eliminate data entry errors related to dimensions. Replace the keying of box sizes with barcode scanning. Many of our customers print a template of barcoded carton sizes for each carton type. The shipping clerk scans the barcode instead of keying in numbers – and potential upcharges related to incorrect measurements are eliminated.
√ Integrate box types into the order process. Set up your box sizes as a series of codes that can be passed from the order system and passed to your shipping system. If you’re using an automated packing solution like Pack-IT, the operator can scan a carton type as they are packing the order.
√ Audit your inventory of carton types and sizes. Make it a regular practice to verify all of your carton or box types and compare them with your carriers’ measurements of the same. This can prevent back charges from occurring on future shipments.
These best practices can help you control “after the fact” shipping charges.
The question remains as to how to control the proportion of your shipping volume that will be subject to dimensional rating.
Unfortunately, there’s no simple answer to this challenge, which will face many B-to-B and particularly B-to-C shippers. One of the best solutions is to implement a multi-carrier shipping solution that allows you to easily add other carriers who will not apply dimensional rating to all of their shipments. We’ll cover this in our next post. In the meantime, we’d be delighted to discuss your dimensional rating questions with you. Please contact us today.
“Tough love” or power grab? FedEx’s shift to dimensional pricing is in eyes of the beholder,” DC Velocity, May 12, 2014.