Nine months into the new world of dimensional weight pricing for smaller parcels, what are merchant shippers doing to address the increased costs?
The decision by UPS and FedEx to expand dimensional weight pricing in January 2015 to parcels under three cubic feet – known widely as the DIM rule – was one of the biggest changes to hit shippers in years. It has forced them to rethink their entire approach to packaging and shipping, as millions of items that had been billed based on weight alone are now subject to a calculation based on weight and package dimensions.
Industry experts estimate that retail shippers are seeing an average increase of 17% in their 2015 ground shipping costs from the major carriers on parcels affected by DIM, in some instances going as high as 30%.
Some of the main ways DIM is being addressed include:
- Pursuing carrier and shipping mix options: This can mean looking at increased business with providers like the U.S. Postal Service or regional carriers, as well as actively negotiating with UPS or FedEx to lessen the impact of DIM. Depending on volume and leverage, this has included a delay in DIM imposition, or the creation of a customized calculation that softens the blow.
- Looking at packaging solutions: This includes expansion of box inventory, as well as tactics like arranging pack-out areas with color-coded carts, and storing items by cubic volume, if SKU level allows.
- Exploring technology options: Solutions range from systems that automatically custom fit a box to the product in order to reduce its volume, to others that divert some orders to polybags instead of boxes, also cutting down on space and costs.
To hear more about how DIM has impacted shippers nine months later – and what they’re doing to address it and mitigate the added costs – join Multichannel Merchant and an expert panel for an informative webinar, “Overcoming the Impact of Dimensional Weight Pricing,” to be held Thursday, Oct. 29, at 2 p.m. ET.