The increasing convenience and affordability of online shopping continues to drive consumers to buy more online — and increase those consumers’ expectations to receive their items in perfect condition, as quickly as possible. A report from eMarketer reveals that during the 2018 holiday season, e-commerce sales alone rose 16.7% to $123.9 billion. E-commerce seems poised to gain in market share over brick-and-mortar retail.
This consumer hunger for perfect-condition products delivered within days — or sometimes hours — is expected to continue. The consistent pressure to meet or exceed consumer expectations isn’t only being felt by e-commerce retailers. The carriers that connect the dots between order fulfillment and customers’ doorsteps are feeling the pressure too, and they’ve changed how they calculate freight costs to incentivize retailers and fulfillment centers to make the most of every box that goes on a truck. The result? Dimensional weight (otherwise called dim weight) pricing models.
Dim weight pricing has ripple effects
This is no longer news. UPS and FedEx implemented dim-weight pricing in 2015, and we’ve seen enough cautionary tales about freight costs to know that most online retailers and fulfillment centers are taking closer looks at their freight charges and seeking ways to eliminate chargebacks.
As a packaging solutions provider, Sealed Air knows how to prevent companies from being surprised by freight costs. It’s something we help our customers do every day — along with eliminating damage and optimizing efficiency.
Now, the U.S. Postal Service (USPS), which delivers more than 40% of residential e-commerce parcel shipments, has also implemented dim weight pricing. Effective June 23, 2019, USPS has a new dim weight divisor for packages larger than 1 cubic foot (1,728 cubic inches), adjusting it from 194 to 166, representing a 14% increase in volume cost. On the same date, dim pricing was added to all shipping zones for Priority Mail, Parcel Select and Priority Mail Express for all packages larger than 1 cubic foot.
How is USPS dim weight pricing calculated?
Essentially, larger packages are charged at higher rates, even when their actual weight is low, because they are taking up space that could’ve been filled by other parcels. For example, imagine a package that is 1,872 cubic inches, with an actual weight of 2 lbs, 12 oz.
On June 22, 2019 its zone 4 billing weight cost would be $8.24. USPS would round up its actual weight to 3 pounds and would not calculate dim weight. That same package, shipped after June 23, would have a zone 4 billing weight cost of $15.83. The actual weight estimation would stay the same, at 3 pounds, but the dim weight cost would be 12 pounds.
USPS will charge the price that is larger, whether it’s actual weight pricing or dim weight pricing. This means online retailers and fulfillment centers that haven’t been as impacted by dim weight pricing in the past will no longer be able to avoid it.
Here are five ways to help take charge of your freight fate:
- Rightsize your packaging.
The goal of a carrier is to maximize space on each truck. Rightsizing your packs — through automation or by having a diversified range of packaging SKUs — will help ensure each parcel is as small as it can be, saving you on freight costs.
- Keep boxes smaller than 1 cubic foot.
The new USPS dim weight pricing will affect parcels larger than 1 cubic foot. To account for this, online retailers and fulfillment centers that ship through USPS could find cost savings by breaking up large orders into multiple shipments of smaller parcels.
- Rethink the box.
A corrugated box isn’t always the best shipping carton. Online clothing retailers often have great results with flexible polybag mailers, and customers love them for easy returns. (Just make sure you’ve planned for return logistics!) Other e-commerce shops choose padded mailers. There are many alternatives to a corrugated box that don’t risk product integrity. Sealed Air’s Packaging Design Application Centers offer packaging consulting, design and testing services to customers every day.
- Choose a flat-rate box.
When shipping USPS, a lower-volume e-commerce retailer might choose a flat-rate Priority Mail box paired with packaging foam or on-demand void fill such as BUBBLE WRAP® brand air pillows or BUBBLE WRAP brand inflatable cushioning.
- Don’t guess.
It’s important to accurately assess the actual weight and dimensions of each parcel. Many carriers use dimensionalizers; equipment that scans and weighs packages as they’re processed. Should you underestimate calculating dimensional weight for larger packages, these automated measurement systems will notice — and charge you the balance. You could also encounter chargebacks, which are fees applied in response to these incorrect calculations.
Don’t let the story of your business become a cautionary tale for others. Make a plan to implement changes and take charge of your freight fate — before peak season arrives. Need help? Our packaging experts can help guide you on your way.