The dimensional weight (DIM) based pricing system, which uses the measurements and volume of a package to determine shipping fees, has become standard in the shipping industry — which means you might be overpaying on shipping costs if you’re not using the optimal packaging sizes.
This article explains dimensional weight, how it affects ecommerce shipping fees, how to calculate dimensional weight, and how strategic planning and space optimization can save you thousands of dollars in the long run.
What Is Dimensional Weight?
Dimensional weight, also known as volumetric weight, is a measure used in the shipping and logistics industry to determine the cost of transporting an item based on its size rather than its actual weight. Every carrier has its own policies for calculating DIM weight, but the method to determine package volume – using length, width, and height – remains consistent. Shipping companies then divide this cubic volume by a number known as a dimensional divisor, which differs by carrier, in order to get the DIM weight. This is what they then use to define their shipping charges.
The higher the DIM divisor is, the less expensive a package will be to ship. Service providers update their standard DIM divisors every year to keep up with changes in the cost of shipping. Cost averages in the U.S. domestic ground industry have steadily declined from the upper 100s to 139 over the past decade, indicating an increase in prices for customers.
The dimensional weight calculation method differs depending on the measurement system used. For domestic shipments within the U.S., dimensional weight is calculated using the customary system, measuring volume in cubic inches and dividing by a divisor, typically 139, to determine weight in pounds.
Internationally, especially in air freight governed by IATA standards, the metric system is used, calculating volume in cubic centimeters and dividing by a different standard divisor, often 6,000, to determine weight in kilograms. This distinction is crucial for accurately estimating shipping costs and requires attention to the specific standards applied by different carriers and in different regions.
When and Why Is Dimensional Weight Used?
Dimensional weight effectively became the shipping industry's standard method of determining pricing in 2015 when UPS and FedEx both switched to DIM weight-based systems. Before the change, shipping costs were solely determined using the standard factors of actual package weight and travel distance. Now, major shipping carriers like USPS, DHL, and Canada Post have all adopted DIM weight as the primary factor in determining shipping costs.
Major carriers now prefer DIM weight pricing because it reflects the economic value of space in their operations. Compact packages allow for more cargo to fit into each delivery truck, enabling more deliveries per trip. This equates to cost savings for carriers while simultaneously tackling issues like fuel consumption and material waste.
Dimensional Weight vs. Actual Weight
It's important to recognize that dimensional weight won't always be the default pricing technique used for your package. Now, shipping companies look at both the size of the package (dimensional weight) and its actual weight, then charge based on whichever is more. If a package is big and bulky but light, you might pay more because it takes up a lot of space. On the other hand, if it's small but heavy, the cost could be higher due to its weight. The goal is to pack smartly so your package doesn't end up costing more to send than necessary.
Does Dimensional Weight Matter?
DIM weight-based pricing has significant implications for ecommerce brands as it requires them to think carefully about package sizes, design, and dunnage materials. All of these factors can potentially influence an item's DIM weight and, consequently, its shipping cost.
For example, let’s say your fulfillment team uses the same 10 x 20 x 10 inch boxes for every order it packs. That would give each order the same volume of 2,000 in³, unnecessarily increasing the DIM weight – and therefore shipping cost – of products and orders that don’t require as much space.
With higher shipping costs comes the need to increase product prices, sacrifice profit, or tack on additional shipping charges. Making the effort to add a variety of packaging with different dimensions to your order fulfillment process can mean saving money that can then be passed on to customers or reinvested in your business.
How to Calculate Dimensional Weight
Volumetric weight calculations work with three-dimensional units of measurement like cubic inches or cubic centimeters. The cubic size of a package serves as a basis to determine its shipping rate using a dimensional factor, or DIM divisor.
The standard dimensional weight formula is:
Dimensional Weight = (Length x Width x Height)/Divisor
1. Measure the Package
Begin by finding the volume of your package in inches or centimeters. This will require the use of another, smaller formula:
Volume = (Length x Width x Height)
Measure the longest, widest, and highest points to find length, width, and height, respectively. The resulting number will be the volume of your package measured in cubic inches or cubic centimeters.
2. Round Your Measurements
Next, round each dimension up to the nearest whole inch or centimeter. This is important for the purposes of both simplicity and accuracy. Most major carriers round up to the nearest whole number when calculating dimensional weight pricing, so it's best to follow suit.
3. Determine the DIM Divisor
The DIM divisor is used by shipping companies in order to find an accurate representation of a package's actual weight. As mentioned before, the divisor varies depending on the system used by different countries and organizations.
4. Calculate the Dimensional Weight
Apply your rounded measurements and the appropriate DIM divisor for your preferred shipping carrier to the formula. Keep in mind that divisors and rates are subject to change, so always verify with your carrier for the most current divisor.
Examples of Dimensional Weight Calculation
Let's put the above steps into practice with a few examples of how you might calculate dimensional weight in real-world contexts.
Example 1
A package of shampoo has a length of 10 inches, a width of 8 inches, and a height of 6 inches.
The volume can be calculated as follows:
10 x 8 x 6 = 480 cubic inches
Using the U.S. Imperial divisor of 139, we can calculate the dimensional weight as:
480 / 139 = approximately 3.45 lbs
Example 2
A large box of pool noodles measures 40 x 20 x 10 inches.
The volume can be calculated as follows:
40 x 20 x 10 = 8,000 cubic inches
Divided by 139, this is equivalent to:
8,000 / 139 = approximately 57.55 lbs
Comparing a small but heavy box of shampoo to a large but light box of pool noodles, it's reasonable to expect that the shampoo box will be charged based on its actual weight, while the pool noodles box will be charged based on its dimensional weight. Optimizing packaging to reduce unnecessary volume and weight can help mitigate higher costs in either case.
Instead of manually calculating the dimensional weight of your package every time, you can download our free dimensional weight calculator. This calculator automatically calculates the DIM weight according to your measurements and will tell you whether each major shipping carrier will charge you based on the DIM weight or the actual weight of your package!
Download Our Free Dimensional Weight Calculator
How to Keep Your Billable Weight Low
The costs and confusion of dimensional weight-based pricing can be mitigated with the right strategies. This section lists three different ways you can minimize shipping costs under this model while maintaining the level of delivery quality your customers have come to expect.
Keep Shipments Compact
The dimensional pricing system was introduced to recognize the equal value space has to physical weight in shipping. It's set up to reward those who can pack items tightly and likewise forces those who don't to pay. Keep costs low by opting for smaller packaging and using compact, lightweight packages instead of oversized ones whenever possible. Doing so can save on fulfillment costs in more ways than one - you'll be paying less for both the materials themselves and space-based shipping charges.
A package's footprint can be further shrunk by leaving the assembly to consumers. IKEA offers a great real-world example of this strategy in action, being famous for its ultra-compact and affordable furniture delivered in flat boxes to homes around the world.
Utilize Software to Identify Areas for Improvement
It can be difficult to keep track of and calculate the optimal package size for each of your products – not to mention figure out whether standard size (which might result in slightly extra space) or custom-sized (which are more expensive to produce) boxes are the most economical.
Luckily, there is now software capable of doing it in seconds while considering various additional factors like stacking constraints, box orientation, and more. It requires a significant upfront investment, though, which not every ecommerce brand is ready to make. A reliable third-party logistics (3PL) provider will already have systems in place to efficiently determine optimal package sizes. By partnering with a 3PL, your business will benefit from advanced software and streamlined fulfillment operations for a much lower monthly cost – without having to worry about optimizing for DIM weight when shipping.
Be Selective With Dunnage
While keeping shipping costs down is an important aspect of running a successful ecommerce business, that shouldn't come at the cost of product protection. Skimping on dunnage to reduce DIM weight charges might seem cost-effective initially, but it risks the integrity of your products. Goods damaged in transit are likely to be returned, expecting a refund or replacement, which can quickly erase any savings from lower shipping fees.
However, it’s important to choose the right type of dunnage for your products, since using overly heavy or excessive packing materials can inadvertently increase the billable weight of your shipments. Unnecessary costs can be mitigated with the thoughtful selection of package-filling materials. You'll want to use something that's both effective in insulating items from shock and lightweight so as not to weigh down the parcel and add extra costs.
Some popular dunnage options include air pillows, bubble wrap, and paper packing. These are all lightweight but effective packaging materials, which can provide the necessary protection without significantly adding to the package’s weight or volume.
Understanding what dimensional weight is and how it's measured is incredibly valuable when it comes to reducing shipping costs. However, for a business focused on growing, it can be difficult to keep on top of optimizing packaging and shipping. Partnering with a 3PL provider like Shipfusion means you’ll always get the best prices when it comes to order fulfillment, without having to think about it.
Shipfusion’s proprietary software automatically selects the best packaging option to keep DIM weight charges down. Your ecommerce business can achieve further cost savings by taking advantage of the exclusive shipping rates we get through our partnerships with major carriers – savings of up to 37%.
If you’re interested in minimizing your shipping costs while optimizing your order fulfillment, contact one of our fulfillment experts today.
