Why Dimensional Pricing Software Matters
Ever since 2015, the process of weighing your best shipping options for ground delivery no longer included taking into account a package’s actual weight. Why do businesses no longer factor in actual item weight when shipping anymore? This change occurred two years ago when major carriers, such as UPS Ground and FedEx Ground, stated that packages were no longer charged based on item weight but rather off of dimensional weight. Dimensional weight is defined as the amount of space a package takes up, not the actual weight of the item. You can calculate your package’s dimensional weight by multiplying the length x width x height and dividing it by your carrier’s specific dimensional divisor. Always make sure to round up to the next whole number as well.
Ex. Dim weight (1,728 cubic inches)/166 (UPS Dimensional Divisor) = 10.40 → 10lbs . Based off of dimensional pricing, you would then pay to ship a 10lb package.
Seems like a pretty simple formula. Package your item in the smallest possible space to avoid spending the maximum amount of money. However, even though your item’s metrics will never change, that doesn’t mean that carriers can’t change their dimensional divisor sizes. In fact, as of January 2017, FedEx decreased the size of their dimensional divisor, thus increasing overall shipping prices. As a result, no matter how you package your items, because of the lower dimensional divisor size, packages will begin to be weighted as “heavier”, and therefore be more expensive to ship. With leading shipping companies increasing shipping prices, it is only a matter of time before additional companies follow their suit.
As the price of dim weight shipping increases, the use of dimensional pricing software becomes increasingly important. In order to avoid losing money to dimensional pricing, warehouse workers need to either spend more time trying to guess the optimal box size for an item or face increased costs by picking a box that requires higher shipping rates. This is why picking the optimal box size for packaging is so important, especially for companies that ship in high volumes. Each additional unnecessary shipping charge either diminishes your company’s margins or causes higher customer prices, both of which can negatively affect your businesses.
So what’s the solution? By using dimensional pricing software like ShipHawk–a platform that is fully integrated with online marketplaces, shopping carts, and shipping carriers–there is no longer any question about how to get the best deal. Rather than constantly testing out different sized boxes yourself or unknowingly picking a larger box than needed, ShipHawk’s software automatically compares and contrasts each carrier to find the best pricing and packaging for your unpacked item. By computing the item’s dim weight, origin, destination and other details, ShipHawk’s packing optimization not only increases efficiency, but more importantly saves businesses money that would have been otherwise wasted on unnecessary shipping charges.