What is dimensional weight pricing?
Dimensional weight pricing is a way of calculating shipping costs based on the size of a package rather than just its weight. This is because carriers have to account for the amount of space a package takes up in their trucks and planes, not just its weight. So, a larger package takes up more space and thus costs more to ship.
To calculate dimensional weight, carriers use a formula that takes into account the package's length, width, and height. They then compare the dimensional weight to the actual weight of the package and charge whichever is higher. This means that even if a package doesn't weigh much, it can still be expensive to ship if it's large.
Why does FedEx use dimensional weight pricing?
FedEx (brand name removed) and other carriers use dimensional weight pricing to ensure that they are fairly compensated for the space that packages take up in their vehicles. This helps them run their businesses efficiently and keep costs down, which ultimately benefits customers by keeping shipping rates more reasonable.
How can businesses reduce their shipping costs using dimensional weight pricing?
There are several strategies that businesses can use to reduce their shipping costs using dimensional weight pricing:
1. Choose smaller packaging: If a package is too large for its contents, it will be charged based on its dimensional weight rather than its actual weight. By choosing smaller packaging, businesses can reduce the amount of space their packages take up and potentially reduce their shipping costs.
2. Use package optimization software: Some shipping software includes features that can help businesses optimize their packaging to reduce shipping costs. This software can suggest the optimal box size and packing materials based on the size and weight of the item being shipped.
3. Negotiate with carriers: Some carriers may offer discounts or waivers on dimensional weight charges for businesses that ship large volumes of packages. Businesses can negotiate with carriers to try to secure more favorable rates.
4. Use a third-party logistics provider: Third-party logistics providers can help businesses optimize their shipping strategies, including using dimensional weight pricing. These providers may have access to better shipping rates or special services that can help businesses save money.
In conclusion
Dimensional weight pricing is a common practice used by carriers like FedEx (brand name removed) to account for the space packages take up in their vehicles. Businesses can reduce their shipping costs by optimizing their packaging, using package optimization software, negotiating with carriers, or working with third-party logistics providers. By being mindful of dimensional weight pricing, businesses can keep their shipping costs under control and improve their bottom line.