Shape Your Shipping Strategy with Dimensional Weight Calculations How do you know if you are getting the best parcel rates for your goods? Simply follow a few rules of thumb, and gain confidence that you have truly captured the very best pricing available. MULTI-CARRIER SHIPPING Reaping the greatest savings on shipping requires a two-pronged tactic. Start by applying a multi-carrier approach to all of your business dealings. That way, you can pivot from one carrier to the next if it makes sense to do so. Or consider using a company like Visible Supply Chain Management that has adopted a multi-carrier approach from the beginning. Thanks to Visible’s carrier-agnostic strategies, coupled with its high-volume buying power, we can pass along deep savings to customers. DIMENSIONAL DISCOUNTS MATTER The multi-carrier hurdle is only half the battle. Dimensional discounts and surcharges must also be taken into account. These often times poorly understood concepts are vitally important to consider in order to secure the best pricing, no matter what you ship. Why does dimensional pricing even exist? Private carriers’ pricing structures were historically suited to large packages, and to high volumes of packages, traveling to one location. Now, with the rise of e-commerce shipping, more individual items are sent directly to people’s homes. To counter the rising cost of small residential shipments, carriers added a surcharge specifically to small packages — the dimensional pricing surcharge. USE DIMENSIONAL PRICING TO YOUR ADVANTAGE Dimensional pricing can work in your favor if you are highly aware of your packaging’s dimensions. Savvy business owners have already reduced package size to negate the impact of dimensional surcharges, but the latest dimensional divisor
reduction demands that shippers approach this problem with even more scrutiny. In many cases, shifting to an even slightly smaller box with less internal padding can make a difference. So can selecting the right carrier. Consider the following: Dimensional discounts with the USPS apply to packages that are lighter than 20 pounds and less than 50% of a cubic foot. To determine if one of your boxes applies, use the following formula: (Length” x Width” x Height”)/194 Further discounts apply if a package is 40%, 30%, 20% or 10% of a cubic foot. For example, car alternators can be expensive to ship because they are relatively heavy. But they are also small, usually around 7” x 7” x 7”. If an alternator is shipped via USPS, and it is charged based off the actual weight, the price could range between $9.50 and $43.50. When applying the dimensional discount formula, an alternator is 20% of one cubic foot, lowering the price range from $5.75 to $7.10. That’s a big difference and underscores the importance of matching your shipment with the right carrier. THE E-COMMERCE EFFECT As e-commerce’s popularity continues to rise, small parcel rules will only get more complicated. The importance of knowing the dimensions of your package cannot be overstated. Enlist a company with deep parcel experience, like Visible Supply Chain Management, to analyze your parcel needs. Dimensional surcharges present challenges, but don’t just sit back and absorb the extra costs. Take advantage of the rules where you can. Visible exists to optimize your shipping by finding ways to avoid expensive surcharges via multi-carrier solutions.
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PARCEL May/June 2018