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Minimize the impact of DIM pricing on your budget

Jul 17, 2015

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Our last post was about DIM (dimensional weight) Pricing, a method of calculating a billable weight for a shipment based on a minimum density imposed by a freight carrier. We discussed many topics relating to this pricing method including some initial steps you can take to minimize the impact of DIM pricing on your budget. Here we’re looking at additional steps to help contain costs relating to DIM pricing.

Minimize the volume of your packages

A larger package means a greater dimensional weight. Make sure there is as little empty space in your packages as possible. Use lightweight but strong packaging materials that do not bulge or expand.

 

  •  Determine the minimum box size you need to protect the contents while using a box no larger than absolutely necessary.
  •  Use cartonization logic software to evaluate order contents to automate the selection of the correct number and size of            shipping cartons for each order if possible. This software considers dimensions and weights of items to determine the              smallest box/container for the best balance of content protection and dimensional weight.
  •  Use lighter but stronger packaging materials that will not bulge or expand to prevent changes to the dimensional weight          during transit.
  •  Use air bags, bubble pack and pouches instead of heavier packing materials to cushion carton contents.
  •  Consider custom box manufacturing equipment to build optimum packaging of orders that routinely vary in content          combinations.

 


Consider using a different pallet

Spending a little more money on a pallet by increasing its strength and stiffness can potentially lead to significant cost savings in other areas.The size, weight, and stackability of pallets and packaging have a direct impact on transportation costs. For loads that are only shipped one high, what would be the logistics cost impact of switching to a stackable crate or some other type of transport packaging?  It is likely that the improvement in shipping costs would offset the increased packaging costs.  Not to mention the other benefits that could be achieved through a reduction in product damage.

Capture and record accurate DIM weights

While many companies have scales on their docks, not all of them have the technology to determine cubic space occupied by their freight. Get Accurate DIM Pricing by using a Large Freight Cubing System. Typically called pallet-dimensioning systems, this technology allows you to record accurate dimensions and DIM weights at the time of shipment. It may be helpful in verifying the dimensions calculated by LTL carriers as well.

Renegotiate your Contract for a Higher DIM Factor & More

A higher DIM factor equals a smaller dimensional weight for your package. Ask your carrier for a higher DIM factor or switch to a carrier that has one. Other factors you can negotiate with a carrier for your contract are:

  • A higher cubic threshold. This increases the space you can use without increasing the dimensional weight.

  • Incentives to offset the high shipping rate.

If you need help negotiating with a carrier, a 3PL may be able to help.

Refuse to Ship By Air whenever possible

Although perceived to be faster it is also more expensive.

Refuse to Ship Low-weight, High-volume Goods

The dimensional weight of the package will be much higher than its actual weight.

Don’t be a One Carrier Company, Use a 3PL and Their TMS

Too many organizations get comfortable and rely on one carrier for the vast majority of their shipments. Carriers commonly offer free software with training and implementation help that makes things easier, but locks you in.

Consider using more than one carrier, including regional, final mile and specialized transportation companies. Determine what each organization can best provide you and your customers and use it to your best financial advantage. This strategy will improve your negotiating position while increasing your customers’ satisfaction and your bottom line.

­­­­­­­­­­­­­­­­­­­Simplify the process

Don't have time to work with multiple carriers, manage those contracts & negotiations, or to research the various rates for every shipment? Then it may be time for you to look towards a 3PL like American Group who has expertise in transportation management through years of industry and carrier experience.

Contact us at 1-866-553-6608 for Shipping.Simplified®.