How to Calculate Dimensional Weight: Pricing Space for Postal Shipping Success

by | Oct 18, 2019 | Cubing Solutions, Enterprise Mobility Solutions

Imagine the ease of moving a truckload of large buoyant polystyrene balls. Compare that to moving a truckload of fuel-sapping bowling balls. Both shipments occupy the same space in the truck…

Yet, the discrepancy in total cost for shipping heavy bowling balls – such as higher fuel use, added vehicle wear, greater loading and unloading time and energy, and so on – clearly demonstrates the need to put a dollar value on the cargo space occupied; no matter how light a shipment may be.
Space on a transport carrier is a precious commodity. Freight shipping being charged based on a parcel or pallet’s actual dead weight is now the exception rather than the rule.

Capacity Crunch: The weight versus space issue

Several years ago, commercial freight transport companies across the globe, led by US giants FedEx and UPS, realised that shipping lightweight packages based on a fee to transport actual ‘dead’ weight – rather than the total space occupied in transit – was shrinking profits.

The widespread rise in online e-commerce orders prompted the need for a better, more uniform pricing strategy to safeguard carriers against losing money when transporting increasing numbers of lightweight packages.

Consequently, the equitable concept of charging freight based on volumetric or dimensional weight was created and rapidly adopted by the postal, supply chain, and transport and logistics industries.

Dimensional Weight Formula: Levelling the space playing field

Applying a dimensional weight formula, in effect, establishes a minimum charge for the cubic space occupied and calculates a theoretical ‘weight’ for the package.

Typically, shipping carriers will establish a dimensional weight, or ‘dim’ weight, for larger lightweight packages, essentially as a penalty on a dead weight shipment that is oversized. For most customers, this makes sense. A parcel or pallet occupying valuable space on a transport carrier should cost more; usually upon reaching some defined weight-to-space ‘tipping point’.

Logically, the higher value of actual weight or dim weight calculations, is the billable weight.  So, most courier and shipping companies will capture both measurements, then apply their own dim weight parameters to determine how to charge.

For example, a postal carrier generally calculates the dimensional weight of all parcels over one kilogram, then charges according to whichever is greater; dead weight or dim weight. In most shipping operations, the dim weight calculation is rounded up to the next kilogram.

Cubing Freight Parcels

To determine a package’s dimensional weight, first you need to know the cubic volume of your package. This is the volume of space your parcel will occupy during each phase of transit to its final delivery.

Simply, measure the length (L), width (W), height (H) of your parcel at the longest, widest, and highest points in metres, centimetres or inches.

Then, multiply L x W x H to determine the parcel’s volume in cubic units, otherwise known as the cubic volume.

For example, a small box with L = 20 cm, W = 20 cm and H = 20 cm would be:

Next – to calculate a final nominal ‘kilograms’ of dimensional weight – you need to apply what’s known as a ‘Dimensional Weight Factor’ or ‘Dim Factor’ to your parcel or pallet’s cubic volume.

Dim Factor Explained

But, first, let’s discuss what a Dim Factor actually is…

The Dim Factor is a mathematical value of the allowable volume of a package per unit of weight (e.g. 5000 cm3/kg) or the allowable weight of a package per unit of volume (e.g. 200 kg/m3).

Every shipping company, in theory, can pre-determine and set their own dim factors to calculate the value of cargo space on their carrier vehicles, and subsequently extract that cost from the customer.

Although international air freight pricing, for instance, is overseen by regulators, i.e., the International Air Transport Association, transport carriers are not required to use designated or standard dim factors.

In fact, shipping companies can apply different dim factors depending on variables such as mode of transport, final destination, express delivery services, shipping zones and so on. They can even offer a competitive dim factor for high-volume freight customers or negotiate a specific dim factor for an uncommon type of freight customer.

Major carriers assess their operational expenditure plus commodity and market competition to develop economically viable dim factors and other rules for charging shipping rates.

In short, the dim factor ensures every vehicle carrying cargo makes a profit above and beyond the associated delivery costs incurred.

How to Calculate the Dimensional Weight of a Package

Because dim factors are specific to a shipping carrier, they may be expressed in metric or imperial units depending on local conventions and/or shipping destinations. As long as package dimensions are measured in the same length units as the dim factor, the dimensional weight formula will work accordingly.

Most carriers don’t explain the units of measurement associated with their dim factor, because it’s confusing!  Instead, they provide handy online tools to automate the full dimensional weight calculation for their customers, such as here and here.

However, it’s useful to know how an online dim weight calculator makes the dim factor units ‘cancel out’ in order to determine the theoretical dimensional weight of a package.

A carrier’s dim factor (DF) can either be a divisor or a multiplier of the parcel’s cubic volume, depending on whether the volume is in cubic centimetres or cubic metres, respectively.

Similarly, for volumes in cubic inches or cubic feet, the dim factor is a divisor or multiplier, respectively.

So, if you’ve ever wondered why some companies divide cubic volume by a dim factor whereas others multiply cubic volume by a dim factor – below we demonstrate how it works using an example.

The commonly used dim factors 5000 cm3/kg and 200 kg/m3 have different measurement units, but are effectively the same for resolving how much physical space a package occupies as volumetric weight.

Your sample parcel or pallet has centimetre dimensions of length (L) = 100 cm, width (W) = 100 cm and height (H) = 100 cm.  In metres (m) these same dimensions would be: L = 1.0 m, W = 1.0 m and H = 1.0 m.

As you can see, both calculations result in 200 kg as the nominal dimensional weight, which would then be subject to the carrier’s cost per kilogram rate.

This is the weight the package would theoretically weigh if it had a packing density of 200kg/m3 or a specific volume of 5000cm3/kg.

Note: In this example, if the actual weight of the package’s contents is heavier than 200 kg, then the shipper would likely charge based on the higher dead weight value. Furthermore, carriers applying a dimensional weight formula for shipping freight will round dim weight values up to the nearest kilogram or pound to maximise returns on the volumetric space occupied.

Saving Space Saves Money

In summary, lightweight items packed in oversized boxes force shipping carriers to reach their maximum dimensional or volumetric capacity well before they reach their actual weight capacity. Generally, carriers re-coup losses using the above freight dimensioning calculations and dimensional weight formula.

An understanding of dim weight calculators, the dimensional weight formula and dim weight pricing for shipping is vital for e-commerce businesses; particularly in negotiating shipping rates with carriers, as well as optimising how efficiently items are packed to achieve a lower dim weight.

Miscalculated dimensions can result in increased shipping costs and freight non-compliance problems, so knowing how to correctly and accurately perform dimensional weight formula calculations will reduce charge back fees and ease frustrations.

For greater efficiencies and automation in warehouses, in pick-up and delivery businesses, and in any business sending parcels and pallets to customers, there are low-cost dimensioning calculator systems and accurate dim weight pricing tools available.

In addition to appropriately billing customers for the space their parcel or pallet occupies, real-time dimensioning technologies enable your organisation to forward plan resources. For instance, you can allocate covering space on consecutive carriers, arrange personnel to be ready at subsequent destinations and/or assign space for the incoming shipment in distribution centres and retail outlets.

To hear the latest exciting news on real-time workflow-driven dim weight solutions and how they can be successfully applied to your postal, distribution or delivery operation, contact Leopard Systems today about implementing a scalable cubing solution that will enhance your business operations and reduce revenue leakage.