Combat Increased Dimensional Weight Shipping Costs
Dimensional weight (DIM) is a huge factor to consider when shipping an item as large as a musical instrument. DIM weight is calculated by multiplying the length, width and height of your shipment and dividing it by your DIM divisor (located in your FedEx or UPS contract). Your small-parcel carriers have the ability to charge you based on the actual weight of your shipment or by the DIM weight for every package you ship, so it’s important to stay aware of every FedEx and UPS dimensional weight change.
When FedEx announced its rate increase on September 19, 2016, it proclaimed that it would align the domestic and international DIM divisors rather than having unique divisors for each. So what does this change mean specifically for music retailers? For one, it means that, unless you have a custom divisor, a one-cube (12 x 12 x 12) box will be billed at least 13 pounds. (And how many one-cube shipments does your store have that weigh 13 pounds? That’s fairly heavy.) Currently, this same box would have only been billed at a minimum of 11 pounds, and just a couple years ago, it would have been 9 pounds. So while this single change may seem benign, the dimensional trend has been a painful one for shippers of all sizes.
Let’s use some examples using 2016 rates:
• A zone 8, one-cube commercial ground shipment will be billed a (published) minimum of $18.22 instead of $16.19—a 12.5-percent increase. Just a few years ago (still using 2016 rates), this same zone 8 package could be have billed as little as $8.66. (I’ll let you do your own math.)
• This same zone-8 carton shipped Priority Overnight will be billed $151.27 instead of $136.92—a 10.5-percent increase.
This is on top of an average 3.9-percent rate increase.
So what are your options?
Along with considering regional carriers that may have more favorable dimensional rules, the most obvious is to pursue remedies within your carrier agreement. Beyond that, it’s worth evaluating whether or not your packaging is optimized for your product. Working with your vendors, corrugation providers, or (yes) UPS and FedEx to better design cartons to reduce wasted space, while simultaneously ensuring product integrity, is another option. Package design and engineering can be costly on your own, but the aforementioned providers can help defray some or all of the cost depending on your situation and relationship.
James Matthews is corporate director of parcel negotiations for Lojistic.