DIM Pricing Explained: How It Works and Why It Matters

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.

In this blog post, we'll explain what DIM pricing is, how it works, and how dimensional weight is determined so you can better manage your shipping costs.

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.

How DIM Pricing Works

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. These include:

• Earning more money per truckload based on sheer volume alone

• Cutting down on waste

• Reducing their carbon footprint in numerous ways

• Significantly reducing gas usage by increasing the number of goods carried on one trip

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.

How Is Dimensional Weight Determined?

Most of the larger shipping companies will determine the overall DIM of your goods by using a freight dimensioner 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.

Final Thoughts

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—and the more consistently you audit your freight invoices—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 Redwood's Modern 4PL approach specializes 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, check out our case studies or 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.

FAQs

What is DIM pricing in shipping?

DIM pricing, or dimensional weight pricing, is a shipping method that charges based on a package’s size rather than just its actual weight. The carrier calculates it using the formula (length x width x height) divided by a DIM factor. This matters because large, lightweight packages can cost more to ship than their scale weight suggests.

Why do carriers use dimensional weight pricing?

Carriers use dimensional weight pricing because weight alone does not reflect how much space a package takes up in a truck. Lightweight but bulky shipments can fill capacity quickly, so DIM pricing helps carriers maximize space, reduce waste, and improve fuel efficiency. It also increases revenue from shipments that occupy more volume than weight would indicate.

How is dimensional weight calculated?

Dimensional weight is calculated by multiplying a package’s length, width, and height, then dividing that total by the carrier’s DIM factor. The formula is (L x W x H) / DIM. Because the DIM factor is set by the carrier, the same package can be rated differently depending on which carrier measures it.

How do carriers measure package dimensions for DIM pricing?

Many carriers use a freight dimensioner mounted on or above a conveyor to measure package length, width, and height automatically. These systems may use tachometers, light curtains, or laser scanners to capture dimensions and send them to a computer for the DIM calculation. Small bulges or uneven spots can increase the measured size.

How can I reduce dimensional weight charges?

You can reduce dimensional weight charges by using packaging that fits the product more closely, avoiding box bulges or imperfections, and consolidating multiple items into one shipment when possible. Since DIM pricing is driven by volume, reducing empty space inside the carton is one of the most effective ways to lower charges.

Do all carriers use the same DIM factor?

No, carriers do not all use the same DIM factor. Each carrier sets its own factor, which affects how dimensional weight is calculated and what a shipment will cost. Because of that, it is important to check the specific carrier’s DIM pricing structure before comparing rates or planning packaging.

Why do some packages get charged more under DIM pricing than their actual weight would suggest?

A package can be charged more under DIM pricing when it takes up a lot of space relative to its weight. Carriers price that shipment based on its cubic volume because it uses valuable trailer capacity, even if it is light. In other words, bulky packaging can cost more than a heavier but smaller box.