We’ve all gotten those packages from Amazon with a couple of tubes of toothpaste packed into a 2 foot box stuffed with bubble wrap or those styrofoam popcorns. Those packages take up space the carrier could use to ship more packages if only they were packed more efficiently. It also costs the shipper more than they need to spend. In essence they are paying to ship air in addition to goods in a highly inefficient and unnecessary way.
image source: UPS Daily Rate PDF
In order to create more space for shipping, carriers calculate the dimensional weight, which is the actual amount of space a package occupies in relation to its weight. So, if the toothpaste delivery came in a smaller box with less filler, the carrier has more space for other packages and the deliverer saves money on shipping. Carriers will charge you either the dimensional weight or the actual weight – whichever is higher.
The calculation for dimensional weight is length x weight x height divided by the dimensional divisor (DIM Divisor). The DIM divisor was once as high as 166 but today is 139. The higher the DIM divisor the lower the shipping cost. This is because when you multiply the dimensions and divide the total, if the number you divide by is higher, the total will be lower. As you can see, this indicates that shipping has gotten costlier over the years as the carriers lowered the DIM Divisor, thus raising rates.
Let’s see how DIM weight is determined using a DIM Divisor of 139 (standard today)
Example 1:
Length 10 inches x Width 8 inches x Height 6 inches = 480. We then divide the total 480 by the DIM Divisor 139 to get our DIM Weight. 480/139 = 3.45 lbs. Carriers always round up the weight. So if the DIM Weight is over 3 lbs as it is in this example, the final DIM weight is 4 lbs and therefore the cost of shipping this package is based on a weight of 4 lbs.
What happens if the same exact item that is being shipped in Example 1 is packed in a box larger than dimensions we used? Let’s look at the example below. Same item, larger box.
Example 2:
Length 12 inches x Width 10 inches x Height 8 inches = 960. We then divide the total 960 by the DIM Divisor 139 to get our DIM Weight. 960/139 = 6.9 lbs. We round up as we did in Example 1 and get a DIM Weight of 7 lbs and therefore the cost of shipping this package is based on a weight of 7 lbs.
It is cheaper to ship a 4 lb package than a 7 lb package.
Let’s explore one last example. Let’s say that you are a customer of the SPL Group and SPL negotiates a discount on your shipping costs with a major carrier. Finally, let’s use the dimensions in Example 1.
Example 3: Discounted DIM Divisor
Length 10 inches x Width 8 inches x Height 6 inches = 480. We then divide the total 480 by the discounted DIM Divisor of let’s say 165 to get our DIM Weight. 480/165 = 2.9 lbs. Here we see how a higher DIM Divisor results in lower DIM Weight and creates the discounted price. We round up as we did in Example 1 and get a DIM Weight of 3 lbs and therefore the cost of shipping this package is based on a weight of 3 lbs.
It is cheaper to ship a 3 lb package than a 4 lb package.
Contact the SPL Group to see how to cut your shipping costs, from the actual transport charges to surcharges and accessorials.
