Size Matters

Size Matters

In trucking and ground transportation, shipping costs have pretty much always been calculated by gross weight, either in pounds (U.S) or kilograms (everyone else). It’s easy to understand why when you look at how the trucking industry has been regulated throughout the years, with each state and the federal government making maximum weight capacity requirements for trucking loads allowed on our roads and highways. An effort to keep the public safe from fatal accidents and to help keep our roads from stress and deteriorating quickly.

Recently there has been a push by trucking companies to change the way shippers are charged for moving their goods and in many ways it makes more sense than basing charges on just weight. This new movement towards truckers billing charges based on dimensional weight is not a new concept, but is new to full scale implementation amongst all the major LTL trucking companies.

Historically, air carriers have always charged based on the space on item takes up in an aircraft, allowing for a worldwide industry standard that creates a uniform means of charging shippers for the cubic space their shipments occupy. In fact, the air carriers charge based on the bigger charge of the two.

It looks like the trucking industry will adopt the same standard. If your item weight is bigger than its dimensional weight then you will be charged for that weight but if the dimensional weight is bigger than the actual weight you will be charged for the dimensional weight.

Dimensional weight or “Dim weight” is determined by a minimal density that is chosen by a freight carrier, even though this can be pretty arbitrary and can differ from carrier to carrier there are some common dimensional weight factors. All IATA air carriers use a dimensional weight factor of 166 for domestic air, most domestic ground carriers utilize a factor of 194.

Now we utilize carriers that use different factors, in fact we have a carrier where the factor is 250. So what does this mean? It means the higher the factor the lower your charged weight is going to be.

Size Factors

The calculation is pretty easy length X width X height. So let’s look at what a bigger factor does for your domestic parcel shipment. If you have a shipment that is a box 24x24x24 that equals 13,824 now you take that number and divide it by 194 you get 71.2577 so you will be charged for shipping 72 lbs even if the box only weighs 25 lbs.

If you have a 200 lb. pallet shipment and the pallet is 48X40X48 that equals 92,160 divided by 194 means you will be paying for shipping 475lbs worth of goods. Now we utilize some freight carriers who give us a better factor so let’s ship that same pallet with the trucking company that gives us a factor of 250. 92,160 divided by 250 is 368lbs we are now only paying for shipping 368 lbs not 475!

So with these new size standards coming into play across the domestic trucking industry it’s important to know how to get the best shipping rate based on your commodities weight AND size.

Don’t be a density dunce.

In this new era of domestic trucking, using size to determine your transportation costs will become extremely important to make your shipments as dense as possible. This should transform the pallet and packing industry as well.

Keeping product safe from damage in a smaller space will be a challenge for companies used to shrink wrapping boxes onto a standard 48X40 pallet. If your total cube for a pallet of boxes is only 36X36X36 and you put this on a “Standard” pallet you will be paying to ship a lot of space that has no product in it because your pallet is now making this shipment a 48X40X40 Shipment.

Companies and individuals looking to minimize the costs of their shipments will need to look to custom packing companies like Gateway Crate and Freight to reduce their shipping dimensions and in return reduce their shipping costs.

Packing materials safely, while minimizing density will be a big challenge for many companies in the years to come. Custom packing will become more commonplace as shipping costs increase because of the new dimensional weight standards for ground shipping. Utilizing custom pallets and packing will help companies lower their transportation costs.

The new dimensional weight standard won’t really affect those manufacturers of dense materials but will adversely affect anyone with light weight bulky items. To put it in perspective, if you sell a can of popcorn kernels it has pretty good weight to it, but if you sell that same can full of popped popcorn it doesn’t weigh much but now you will have to pay for it like it was full of kernels.

Starting in the near future adjustments for shipping density will need to be made by many distributors and manufacturers for them to stay price competitive. Now in the domestic trucking industry size really does matter.

If you have any questions about these new standards and how they will affect you and your products, contact any of the knowledgeable professionals at Gateway Crate and Freight toll free 855-474-4685 for a free evaluation of your product and distribution model.