Every day, more than 25 million pieces of freight move through US supply chains. While the majority of these packages ship as a parcel, (think UPS, Fed Ex or USPS for instance), LTL carriers also share a large role in the daily logistics world. In fact, the top 10 consumable products sold at grocery stores are moved through LTL carriers.
With all this freight moving from coast to coast, shippers realize that regardless of mode, most carriers use dimension rating systems to accurately estimate shipping prices.
By basing shipping costs around the exact dimensions of packages, carriers can offer more space for additional freight. In the case of LTL carriers, this is not only logical, but it is also ideal.
Lastly, it also makes an impact on shipper's budgets! And who couldn't use more a few more savings here and there, right?
Interested in learning a little bit about dimensional ratings? Well, then this article is for you!
Where Did Dimensional Ratings Originate?
If you’ve shipped with Fed Ex Express, you’re probably aware of the DIM weight system. It was Fred Smith’s overnight delivery service that introduced dimensional ratings or DIM weights into the logistics space.
By definition, Dimensional rating is a theoretical measurement of a piece of freight or package that considers its volume versus the actual weight or density. Essentially, it considers the amount of space that the freight takes up within a shipping vessel versus the actual size of the product.
To do this, this method measures the X, Y and the Z axis of a piece of freight to determine its volume.
The main reason this rating system was initially used was to find a fair way of charging for bulky freight that contained lightweight products.
In the past, the carrier would simply measure the box and weigh the freight. The heaviest package was typically the charge noted on the shipping invoice, and that was it.
Essentially, this meant that the carrier wasn't charging for all of the exact space being occupied. And on the flipside of that, it meant less freight could be moved at one time from multiple shippers.
Of course, this was not a beneficial system for either side. So, dimensional rating systems were born.
How do Dimensional Ratings Work?
Let’s assume that you’re shipping two products with an LTL carrier.
One of them measures 3 feet long by 4 feet wide by 2 feet high and weighs 150 lbs.
The second box measures 6 feet long by 8 feet wide by 4 feet high, weighs only 30 pounds.
Using the DIM measurement calculator, the carrier would create an actual weight vs the volume weight. The greater of the two, in this instance, the pillow stuffing based on its bulk size, would be rated at a higher cost.
The only real tricky thing is that it’s ‘new’ with LTL and FTL carriers, which makes it a bit of a change for most shippers.
What Shippers Should Do to Prepare for Dimensional Ratings Integration
So, if you’re accustomed to the old-school method of freight estimating, it’s quite possible you’re not comfortable with DIM weight measurements and billing with LTL. However, it’s not as bad as you’d think.
The Dimensional rating system doesn’t take advantage of shippers, it simply makes things fair across the board. That being said, there are a few things a proactive shipper can focus on to ease into this process.
Upgrade your TMS or FMS
Technology simplifies the process of receiving accurate estimates for freight movement.
Most of today’s modern transportation or freight management systems are cloud-based, and frequently updated with carrier rate estimate software. When an LTL carrier swaps over to DIM weight estimations, the new TMS of the shipper will seamlessly update. This provides shippers with updated and current freight rates that comply with the carriers billing method.
Contact Carriers Directly
If you’re concerned about receiving inaccurate freight estimates, the simple solution is to contact carriers you work with directly. This will allow you to remove the doubt associated with DIM weights and billing.
Work with a 3PL
Third-party logistics companies maintain exceptional relationships with all carriers, including LTL and FTL. Before they swap over to new methods, carriers typically reach out to 3PL’s first. Working with a 3PL removes the guesswork and also can help save you money on shipping rates.
Dimensional measuring is eventually going to penetrate the entire supply chain. It’s an effective way to bill carriers and shippers alike, levels the playing field, and reduces invoicing mistakes.
If you have questions or concerns about dimensional or DIM weight integration with any type of carrier mode, contact the 3PL leaders at Redwood Logistics.