April 24, 2015

DIM: A New Way to Calculate Pricing

Author: Judy Wolf

In 2015, UPS and FedEx shifted to dimensional (DIM) weight pricing for ALL packages. This change has substantial ramifications for shippers in terms of increased costs and the potential need to re-engineer business processes.

 

What is it?
Dimensional weight involves factoring the box size into pricing. If the dimensional weight exceeds the actual weight, the shipping rate is based on the dimensional weight instead. Essentially, the bigger the box, the higher the cost.

Why was it enacted?
Many times, due to improper box selection, the carriers find themselves delivering boxes that are much larger than required for the safe delivery of a given product. When magnified across all shippers, this causes vehicles to “cube out” before they actually reach their physical weight capacity. Dimensional rating financially motivates shippers to ensure proper box selection. Of course, across-the-board dimensional rating will be a large source of new revenue for the carriers. Please watch this explanatory video:

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