Dimensional weight pricing, known simply as DIM is a relatively new pricing model that has taken the shipping industry by storm in the last few years. Some companies absolutely despise this new pricing system, while others tout it as being something akin to a “saving grace” for the shipping industry as a whole.
But what is it, and how does it work?
In a nutshell, DIM is a pricing technique that allows shipping companies to charge you based on the size of a package rather than just its weight alone. Basically, it is a clever way for carriers to make more money from shipping your goods while at the same time making the most use of their shipping space.
The reason that DIM pricing became a thing is that carriers started to realize that they were essentially losing money by using pricing models based on weight alone. Lightweight packages can actually take up just as much or more space in a truck than a heavier package. Just because something is lightweight doesn’t automatically mean that it is small. In this industry, it is all about shipping the most units at a time.
So, the logical thing to do was start charging by the “dimensional weight” rather than physical weight. And yes, it is indeed a bit complicated.
Calculating a package’s dimensional weight is done by first multiplying its physical dimensions; length, width, and height.
The sum is then divided by a DIM Factor. This is a value that represents the volume of a package that is allowed per unit of weight, and it is a value determined by the carrier.
The equation looks like this: (L x W x H) / DIM
The advantage and incentive for carriers to implement this cubic volume type of pricing model into their shipping operations are extremely obvious. First and foremost, it earns them more money per truckload based on sheer volume alone, and it cuts down on waste and reduces their carbon footprint in numerous ways.
By increasing the number of goods they are carrying on one trip, carriers could significantly reduce their gas usage. By simply cutting out all the back and forth that comes with only being able to transport a few large lightweight items before having to trek all the way back to the warehouse to grab another load and refueling, carriers could cut their gas bill in half and become a bit more eco-friendly in the process.
Most of the larger shipping companies will determine the overall DIM of your goods by using an automated piece of machinery that mounts on or above a conveyor. More often than not, these systems are equipped with tachometers that are capable of measuring the length of a package as it passes underneath it on the conveyor belt.
After the length is measured, the package then passes through a light curtain or another type of laser scanner which determines the accurate width and height. All of these dimensions are then passed through the computer system that, in turn, performs the equation to find the final dimensional weight based on a pre-programmed DIM Factor.
One interesting thing to note is exactly how these systems work. What they do is start taking their measurements from the highest point on a package and use that as the axis from which to measure downward. Many of these types of scanners are so sensitive in fact, that the slightest bulge, imperfection or otherwise fatter portion of a box that passes through this scanner will increase the overall dimensions.
The next time you are calling around to get the best quote from carriers, be prepared to deal with inflated costs and stricter shipping requirements that you must adhere to. Carriers are looking to make more money and cut their waste in one fell swoop, and the bill is getting passed along to you and your business.
It is crucial that you are well aware of how these systems work, why they are in place, and who stands to benefit from them. The more you know, the more control you inevitably have over your operation.
With so much industry disrupting technology and other advancements in the logistics space popping up every day, it can be a bit hard to keep up with it all. Luckily, that’s what we here at LTX Solutions specialize in… solving those difficult shipping issues.
So, if you are still having trouble wrapping your head around all this DIM pricing stuff, or just need some advice, head over to our contact page and drop us a line. We’d love to discuss some options with you and get you moving in the right direction.