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Each year more and more people are utilizing the e-commerce based shopping experience. This means a growth in parcel shipping. During peak season, most people are looking for deals that will allow them not to break the bank and get them what they need promptly. With most technology and apps available today, it makes it easier to compare which method saves the most.  For shippers, the variety of freight rating and dimensional (DIM) pricing can muddy the waters. Fortunately, DIM pricing weight management within a transportation management system (TMS)can help shippers predict total landed cost more accurately, provided they understand how to apply its weight calculations. 

Using Various Freight Tactics to Reduce Costs & Streamline Management

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DIM Pricing Weight Calculations Remain Overlooked by Many Shippers

With the shipping calculation tools available, it is easier for those shipping parcels to overlook DIM pricing. Because DIM pricing is assessed based on whichever is higher, it could cost much more than shippers realize. If a large but lightweight item is being shipped, DIM pricing would cost the shipper more money than the actual weight.

DIM pricing is becoming more common, especially among the larger parcel carriers. According to Supply Chain Game Changer, Shippers like UPS and FedEx have a limited amount of real estate. Every inch of space in their trailers and delivery vans is valuable. This space has become more and more prized as the volume of goods shipped continues to increase.”  In the coming years, DIM pricing use will likely spike as e-commerce trends upward. As a result, failure to apply DIM weight calculations will inevitably lead to assumptions on total landed cost and contribute to lost opportunities to conserve funds.

The Best Peak Season Freight Management Strategy Keeps Parcel Spend in Check

As well as e-commerce driving up the cost of parcel services, peak season shipping is usually accompanied by peak season surcharges. Unfortunately, failure to account for DIM pricing weight calculations is planning to fail to manage costs and ensure freight moves efficiently. Since the best peak season management strategies rest on keeping parcel spend in check, they must include the dimensional weight pricing factor. In other words, all rated freight should be placed for both its actual and DIM weight. This is the only way to ensure the correct value is used during the tender and avoid unexpected increases or surcharges on the carrier invoice.

Advanced planning is the ultimate way to alleviate excess spending during peak season. Peak season parcel service expenditures increase every year. And managing expenses is essential for keeping within a budget and growing profits. If the economy is booming, so will the parcel services and the fees associated with peak season.

Tips to Reduce Overspend by Managing Both DIM Weight and Actual Weight

As costs continue to rise every year due to booming e-commerce, the prices of peak season will also increase. Staying within budgets can be a concern when consumers expect reduced or free shipping rates. Some ways of combating these costs are:

  1. Know the actual weight of your shipments and the freight class the load falls into. 
  2. Perform and automate DIM weight calculations before entering a tender.
  3. Always use the heavier weight of the two for predicting total landed costs.
  4. Let robotics process automation (RPA), within your TMS, identify and assign the best freight classification and rate. 
  5. Centralize data storage for ease of access and application in subsequent analytics and auditing processes.
  6. Manage by exceptions by allowing the system to handle the most common issues, which frees laborers to focus on what matters: moving more freight.

While these tips are helpful, the most effective tool is being vigilant. Keeping an eye on parcel shipping costs and budgeting for potential cost increases will ultimately prepare shippers for the potential to overspend. 

Listen to “The Big Benefits of Understanding Transportation Accounting to Reduce Transportation Costs” on Spreaker.

Stay Informed of DIM Pricing Weight Calculations WIth the Right Partner

DIM weight certainly has its drawbacks. Shippers need to be aware of all costs, so their budget stays on track. Getting the best peak season rate is indeed a combination of considering both DIM pricing and actual weight pricing. Being flexible is the most effective tool for combating peak season uncertainty and fees associated with increasing e-commerce each year.