ROI Tip #3: One Pound of Popping Corn or One Pound of Popped Corn? Get Control Over Dimensional Rating Issues

Make Sure Your DIM Weight Calculation is Accurate

Have you audited your dimensional rating procedures lately? It’s a good idea, since this is an area where seemingly minor calculation differences can amount to significant back charges from your carriers.

letters-and-numbers2-150x150Before we get into the areas of risk, following are a couple of tips to keep in mind:

  • Dimensional (dim) weight, also known as cubic weight or volumetric weight, is a freight billing technique that is calculated by multiplying the (Length x Width x  Height) applied to a dimensional factor, which varies by carrier and other factors.
  • This is a freight calculation used by a carrier to charge for a lightweight or low-density package (such as a boxed canister of gourmet popcorn weighing 1 pound) as if it had a greater weight (such as a 1-pound bag of unpopped corn). The two weigh the same, but one takes up much more room in the truck.
  • It is commonly used by DHL, FedEx, UPS, the U.S. Postal Service and other carriers for domestic and international shipments.
  • The standard practice followed by carriers is to use the dim weight or the actual weight, whichever is larger, to calculate shipping charges.
  • The typical calculation for dimensional weight is (L x W x H)/166.  So for a 20 lb. package in a 24x24x24 box it may be rated as an 83 lb. package.  (24x24x24 = 13,824)/166 = an 83 lb. dimensional weight.
  • Many freight carriers and logistics service providers have implemented dimensioning systems to automatically measure package dim weights and calculate freight charges.

Hidden costs come into play when you (the shipper’s) calculate the dim weight differently than the carrier’s system calculates it. If the charge should be higher, you will be back-charged by the carrier.

Discrepancies can occur for a number of reasons, including the following:

  • Wrapped-chair1-150x150Actual carton measurement discrepancies: One shipper found that the measurements they were using for their cartons differed from the carrier’s measurements.
  • Carton shape: the volume used to calculate the dimensional weight may not be absolutely representative of the true volume of the package. The freight carrier will measure the longest dimension in each of the length, width and height and use these measurements to determine the package volume. If the package is a right-angled box, this will be equal true package volume. If the package is of any other shape, then the calculation of volume will be more than the true volume of the package.
  • Data entry errors: For example, let’s say you have a shipment that weighs 20 lb., measuring 20” x 20” x 20”. The dimensions are omitted when the shipment is processed, and the resulting charge is $20.00.  However, when the box crosses the carriers facility, its equipment picks up the dimensions, calculates the dimensional rate at $40.00. You will be billed back for the difference. Multiple such errors over a year’s time and they can amount to thousands of dollars in back-charges.
  • Packing processes: For example you pack a carton so full that it causes the size to bulge.  Say you report a 20 lb. carton at 20” x 20” x 20” for a freight charge of $40.00.  If the carton is bulging out to 22” x 22” x 22”, the carrier’s dimensional system will calculate freight at $45.00. One of our customers, a shipper of decorative home accessories, encountered this problem. Many of their cartons were packed with towels, which forced the carton to bulge out, up and down.  A 24”x 24” x 24” carton suddenly became 26” x 26” x 26”.  The carrier was charging back a recalculated dim weight. In this case, ADSI implemented an In Motion dimensioning and weighing system to eliminate the chargebacks.

Four best practices to avoid these charges:

  1. Implement a dimensioning system. A number of solutions are available to accommodate a wide range of operations. Our shipping specialists can help you determine what is best for your company.
  2. Eliminate data entry of dimensions. You can also replace keying of box sizes with barcode scanning. Many of our customers printed a template of carton sizes that includes a corresponding barcodes for each carton type. The shipping operator scans the barcode instead of keying in numbers – key errors are eliminated.
  3. Integrate box types into the order process. Set up all of your box sizes as a series of codes that can be passed from the order system with each order when it is passed to your shipping system. If you’re using a automated packing solution like Pack-IT, the operator can scan a carton type as they are packing the order.
  4. 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.

We would be delighted to discuss your dimensional rating questions with you. Please contact us today.

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