As you go through your eCommerce business, you realize that a package weighs a lot. Also, you learn that it reflects shipping rates. However, this is not always the scenario.
In some instances, a small package is not always cheap. It follows a particular calculation. Learn more about it as we discuss the Billable Weight, Actual Weight, and Dimensional Weight.
Definition of Billable Weight
Billable weight is a pricing technique carriers use to compute shipping rates in every package. But it takes into account both the actual weight and dimensional weight. So it comes between the greater of two. Then, the calculation of the shipping rate follows.
Remember that the actual billable weight is more than the dimensional or actual weight. So it’s crucial to make an accurate computation. Any wrong detail will result in either too high or too low pricing. Thus, affect your business profit in return.
What is Actual Weight
Actual weight is actually how much the product weighs. However, it also includes the packaging materials. So if the item weighs 1.5 kgs and the box is around 300 grams. The actual weight of the entire package is 1.8 kgs.
The measurement of actual weight is easy. With a standard scale, you can determine it already. But you still need to round it off to the nearest whole number. Therefore, the actual weight from the example situation above is 2 kgs.
Identifying Dimensional Weight
Dimension Weight (DIM) refers to the density of the package. So you need to measure the space the box occupies. It’s relatively related to the actual weight.
A great example is a box of ping pong balls. Its weight is low, but the volume is high. The disproportionate amount of space affects the billable weight of the entire package. Basically, dimensional weight is the measurement of the box.
DIM Weight includes the package’s length, width, and height. It takes various formulas for calculation. Then, whichever is higher between the actual weight, the answer is most likely to be the billable weight.
How to Calculate Billable Weight
Calculating the billable weight follows a formula. It needs the actual weight of the package and the dimensions of the box. It is preferable to use a similar unit of measurements. Typically, couriers use the unit inches.
Billable weight = (length x width x height) / DIM Divisor
Here is a step-by-step process to compute the package’s dimensional weight to understand further how it works.
Using the longest point of the box material, measure the length, width, and height.
Afterward, multiply each dimension. It helps you reach the cubic size of the package.
Then, divide the cubic size based on the carrier’s DIM divisor. So, what is the DIM divisor? You may ask your carrier partner about it. But major players use this.
All services offered by FedEx have a DIM divisor of 139.
Meanwhile, UPS has various DIM divisors. For daily packages, it is 139, but for retail packages, it is 166.
Lastly, USPS has a constant DIM divisor of 166.
A helmet package has a dimensional weight of 10x10x10. The courier is either FedEx or UPS for daily packages with a DIM divisor of 139.
(10x10x10)/139 = 7.19
So the billable weight would be 8 kgs since we round off to the nearest whole number.
On the other hand, use the same helmet package but with a different carrier. It is either USPS or UPS for retail packages and has a DIM divisor of 166.
(10x10x10)/166 = 6.02
So the billable weight would be 7 kgs. Wonder why it’s not rounded off to the nearest whole number? USPS uses the actual weight since the package volume is less than 1 cubic. Thus, the additional charge of 1 kg for the actual weight.
Once you figure out the actual weight and the dimensional weight, you compare which is more significant between the two. Then, use it to calculate the shipping fee.
Every time you create a new shipment, it is crucial to include accurate dimensions. In addition, it avoids unnecessary charges from the couriers, especially when the package goes through the conveyor system scan.
Best Packaging Tips to Reduce Shipping Costs
It’s a common dilemma to pay for a high-priced shipping cost of a small package. It breaks your heart and wallet as well. Save your business from such trouble. Follow these packaging tips to minimize the billable weight.
Understand the different packaging selections
One of the common reasons is the mistake of choosing the packaging items. It seems easy to pack and ship using boxes. However, carriers evaluate the dimensional weight of every package. As a result, you might end up having more expensive shipping costs.
As a solution, review all the packaging options. Be more intentional about which packing material suits a specific item. It reduces the billable weight, thus decreasing the shipping fees.
Consider SIOC packaging
Ship in own container (SIOC) is a wise decision in reducing shipping charges. The ordered product is shipped with its original packaging. Thus, avoid incurring packing material like an overbox. A great example of this is items stored in a box already, like a pair of shoes.
Opt for poly mailers
The box is highly used for the safe and secure transit of packages. However, it follows a standard dimension and is not flexible. For example, if the ordered items are t-shirts and dresses, a box might increase the dimensional weight. Thus, it adds to the shipping costs.
So for these products, it is best to use poly mailers or poly bags instead. It is an excellent alternative since it is more lightweight, sturdy, and affordable. Also, it takes up less room compared to a box container. Plus, it has a self-sealing foldover lip that secures the items inside. You can look for a poly mailer with built-in bubble wrap padding if you need an extra cushion.
Using a poly mailer does not need extra dunnage for shipping. Therefore, it is perfect for apparel products. However, it is not advisable for fragile items like glassware.
Shift to palletized freight for oversized items
DIM weight and oversized surcharges are not practical if your business is shipping large products. Switching to palletized freight is the best alternative.
Companies with products like furniture often offer home delivery. Shipping a couch or a fully assembled bike is more convenient if on a pallet. However, you need to inform the customer of the caveats. With freights as your concerns, standard shipping takes longer. So set the client’s expectations about delivery times.
In addition, notify the freight company about the residential address to be delivered. For example, some locations might have smaller streets. Thus, delivery might have difficulty, especially if there’s no loading dock.
Choose a reliable 3PL company.
Another way to reduce the billable weight and shipping costs is partnering with a reliable 3PL company. Look for fulfillment centers like Red Stag that fulfill orders in-house. The company picks, packs, and ships all orders while you’re at home.
In addition, Red Stag offers a variety of packaging solutions. With Red Stag fulfillment lead time, you can potentially save time and money while completing the customer’s order. That’s why it is essential to have a professional work with you. It makes shipping faster, more efficient, and a lot more affordable.