Effective January 1, 2015, FedEx Ground services will be upping the ante and applying a DIM weight pricing guide to all their packages, a change that will likely add up for all U.S. shippers and e-commerce customers in the coming the year. dim weight
What is DIM?
DIM stands for Dimensional Weight. Currently, FedEx Ground charges by weight alone on all packages under three cubic feet. If you bring in a 5 pound package to ship, then you pay for the 5 pounds. Now, with their new dimensional pricing policy, you will be paying for the overall volume, based on a formula.
How Does The Formula Work?
DIM weight is calculated by finding the cubic size of the package in question — length x width x height — and then dividing that number by the predetermined dimensional weight factor. dim weight2
For example, if your 5 pound package is 12 inches long, 12 inches wide and 12 inches high, then its cubic size is 1,728. Divide that by the DIM factor — which is 166 for domestic shipments and 139 for international ones — and you get a billable weight of 10 pounds. (That’s twice as much as the initial 5.)
Why the Change?
According to FedEx, “Dimensional weight pricing is a common industry practice that sets the transportation price based on package volume — the amount of space a package occupies in relation to its actual weight.”
Common practice or not, FedEx Ground has found that bulky, lightweight products aren’t very profitable anymore, especially considering the amount of space that they take up on a truck. Essentially, the DIM pricing policy allows them to charge similar prices for less-than-heavy items as they would for the more substantial ones.
What Can I Do?
You can ship with other carriers for the time being but all signs point to UPS and others adapting to the DIM weight pricing policy as the months roll on.
If you’re a shipper, you might want to consider assessing all packaging containers to ensure that you’re utilizing all available space — i.e. leaving no air unfilled — or changing your methods so that smaller and larger items ship together in a single container.
For shoppers, it might be best to buy those bulky, lightweight items — things like toilet paper and paper towels — in stores and to be diligent in tracking the pricing of online retailers so that you’re not taking the brunt of the cost increase.
In Conclusion
The DIM weight pricing policy is likely to affect a large number of shippers and shoppers once the ball drops on January 1, 2015. It’s important to understand what this means for you and how it might affect your business and buying habits going forward. It could add up, from dimes to dollars.