For eCommerce merchants, one of the biggest expenses that can slash into margins and profitability is shipping fees. To stay competitive, most businesses need to be able to offer fast, reliable shipping which comes at a cost. Fortunately for merchants, competition among shipping carriers has kept prices reasonable in most cases, but to prevent deep cuts into their own margins, carriers introduced something known as dimensional weight pricing.
Dimensional weight pricing did not affect every business. Its deepest impact is seen among those who ship lightweight, but larger packages.
Dimensional Weight Explained
Dimensional weight, often referred to as DIM weight, is a pricing tactic utilized by shipping carriers to prevent them from losing money on oversized, lightweight packages. Space is limited on shipping trucks, cargo planes, and trains. DIM weight takes into account the size of the package versus the conventional pricing method of using its actual weight.
USPS, UPS, FedEx, and DHL will charge shipping fees based on whichever is greater between the actual physical weight of a package or its dimensional weight.
How is Dimensional Weight Calculated?
All carriers use the same method for calculating DIM weight. They take the volume of the package and divide it by what is known as a DIM factor.
Dimensional Weight = (Width x Length x Height) / DIM Factor
DIM weight is rounded up to the nearest whole number. Each carrier has its own DIM factor. For example, USPS use a DIM factor of 166 for retail customers, while FedEx and UPS use 139.
Dimensional Weight Calculation Example
Let’s say you are shipping a package through UPS that is 10 inches wide, 12 inches long, and 3.5 inches high.
To calculate the DIM weight, we will use the equation above.
Dimensional Weight = (Width x Length x Height) / DIM Factor
In this case that would be:
(10” x 12” x 3.5”) / DIM Factor
That leaves us with 420 cubic inches to be divided by the DIM factor. For UPS, the DIM factor is 139. In this case, the package has a Dimensional weight of 3.
If this package has an actual weight of 2 pounds, the carrier would use the DIM weight. If the package’s actual weight is 5 pounds, they would use the actual weight in determining shipping costs.
How Does Dimensional Weight Impact Your Business?
If your company ships products that are on the smaller side but relatively heavy, such as books, you are unlikely to ever feel the impact of dimensional weight pricing. Shipping prices for your products are going to be based on their actual weight.
On the other hand, if you ship large but lightweight products, such as pillows, the dimensional weight of your packages is likely going to be greater than their actual weight and you can expect to pay dimensional weight shipping prices on your packages.
Dimensional weight takes into account the size of a product and its packaging versus the weight. If you find that DIM weight shipping costs are eating into your margins too much, you can consider leveraging a third party logistics company like ShipBuddies to reduce costs. Most 3PL companies are shipping in much higher volumes and can therefore negotiate better shipping prices with carriers, a savings they then pass on to their customers.
