Freight Pricing Continues to Change. Here’s Why
To keep up with the explosive growth of e-commerce, major carriers such as UPS and FedEx have been forced to optimize resources such as space on a truck. The trouble is, those trucks aren’t getting any bigger, and there’s not enough space inside them to keep up with the onslaught of e-commerce deliveries. Carriers realized that charging only by weight for lightweight and low-density packages had become less profitable because of the amount of space those parcels take up in the vehicle in proportion to the actual weight.
To remove complexity from the process, carriers now charge shippers based on package dimensions and package weight. This practice is called dimensional weight (or dim weight) pricing, a technique that takes cube size and actual weight into account.
Freight Costs Rising? We Can Help
Changes in the way carriers determine freight costs are directly related to the need to get as many packages as possible on each truck. That’s why shippers should focus on right-sizing packaging instead of haggling with carriers for lower fees.
With the increased popularity of dim weight-based pricing, freight costs are rising for many businesses, whether a company does in-store fulfillment, drop-shipping or warehouse fulfillment. Bottom line: If you want an accurate estimation of your freight costs, you’ll need to use exact specs (box dimensions and weight), and you’ll need to have a good understanding of your freight bill.