SHIPPING: THE ONLY CONSTANT IS CHANGE If DIM weight surcharges and the like are increasing your parcel costs, there are steps you can take to mitigate their effects.
hile shipping may seem simple to customers (or even company executives), shipping managers know that it’s anything but. Much more goes into shipping than simply getting the order from the warehouse to the customer’s home. Shippers must take into account when the customer wants to receive their order, the packaging, and, of course, the shipping costs. They must also keep up with the latest technologies and regulations in the constantly changing shipping industry. Case in point: dimensional (DIM) weight. It’s hard to believe, but DIM weight was first introduced to ground shipments only four years ago. Before then, shippers were simply charged for the
22 PARCELindustry.com MAY-JUNE 2019
BY JUSTIN CRAMER weight of their shipment, no matter the size of the parcel. All of that changed when two of the largest carriers, FedEx and UPS, introduced DIM weight pricing for all ground shipments. As many know, DIM weight is normally calculated for ground shipments by the length, width, and height of each parcel that is over three cubic feet, regardless of the shipment’s weight. This was a big change for shippers in 2015, especially since many of them experienced significantly higher shipping costs — some increasing by as much as 30%. Unfortunately, these DIM weight rates are only continuing to increase each year, forcing many shippers to continue to find new ways to combat these higher shipping charges in order to avoid impacting their bottom line.
For this reason, shippers are constantly reviewing their shipping procedures and turning to different solutions and shipping strategies. By leveraging the following strategies, companies can exponentially reduce shipping costs while still meeting customer demands. Renegotiate shipping contracts with multiple carriers. Before reaching out to your main shipping carriers to negotiate better rates and update contracts, obtain rates from all viable carriers. It may seem obvious, but knowing what company offers the lowest rate can help you negotiate with your current carriers, as well as update your contract. Your carrier is able to review the number of parcels your company shipped per day/ month/year and the average parcel size so they can create a unique contract designed just for your business. This will dramatically save on shipping costs and help boost business.