UPS and FedEx will start calculating parcels larger than 1 cubic metre based on size rather than weight. The carriers thus hope that shippers will send more compact parcels, using less air. The new calculation method is called Dimensional Weight Pricing (DWP).
For years, only the weight of a parcel was considered. Shippers therefore did not look at the size of a parcel. As a result, many packages were transported that contained mainly air. With the new billing method, this will be quashed. It allows shippers to carry more parcels and thus make more money with the same transport.
What does the new method involve?
To calculate the price, the height, length and width measurements of a parcel are taken. It is then divided by the so-called DIM factor, a constant number calculated for a cubic metre of space. Each shipping company has its own DIM factor. UPS and FedEx's is 166 in the US, while it is 139 for international shipments. The higher the DIM factor, the lower the final price.
Price = L x W x H / Dim factor
However, this does not apply to all parcels. In fact, shipments that are heavier than the DIM calculation will still be shipped at that price.
Cheaper or more expensive?
It seems like UPS and FedEx in particular will benefit from this new measure. But shippers can also make the new billing method work out in their favour with the following tricks:
- Make your parcel as small as possible. See it as a challenge to get the DIM price lower than the price per weight.
- Negotiate the DIM factor. This may not be possible with large companies, but it may well be an option with smaller carriers if you ship more.
- Do not send products that are large but lightweight. Try to focus on small, heavy parcels.
What do you think, will this mode of transport make it to the Netherlands?
Editorial LogistiekProfs
