What is Dimensional Weight?
Dimensional Weight is the calculation of the weight of goods in terms of their dimensions. The length, width, height of a package is used to give a volume, then this is usually increased by a multiplier to give a dimensional weight.
For example we may have an item that is Length 25inches, Height 20in, Width 32in. If we use UPS as an example then for Domestic US Air shipments the Dimensional Weight is calculated as (25*20*32)/166 = 96. The Dimensional Weight would be 96lbs.
How does Dimensional Weight affect Shipment Pricing?
Traditionally the calculation of shipment pricing has been done using the origin, the destination and the weight. I’ve clearly made a generalization in this statement as there are other factors such as the packaging container, account type, etc which affect pricing, but you can think of this as the general rule.
But, with countries such as the US space is of a premium. If you think in terms of an aircraft, let’s say I wanted to send 500lbs of cotton wool. Well this is going to take up much more room than say 500lbs of lead weight. So what logistics companies such as UPS and FedEx have done is created a calculation which takes into account this Dimensional Weight, if its relevant. They look at what is known as the Billable Weight.
The Billable Weight can be simply viewed as the greater of the Dimensonal Weight and the Actual Weight. So if we have the 96lb Dimensional Weight example from above the Billable Weight would be 96lb unless the actual weight is greater. So a 120lb piece of gym equipment would result in a Billable Weight of 120lbs. A 34lb bike would result in a Billable Weight of 96lb. The lower value is ignored.
Why is this Important?
And the reason this is important? Because you will be charged based on this Billable Weight, and not the actual weight. So if you were shipping that bike and only using the actual weight you would have charged the customer a much less lower price than its actually costing you to ship.
Why is this even more important in 2014?
The advent of online commerce has resulted in an explosion in shipments. Just a few years ago most goods were purchased via a visit to the local mall or the Home Depot/Warehouse. Now we are seeing a mass move to getting our goods via the mail.
From a logistics carrier perspective they have been playing catchup with this move to online commerce too, and having to rethink how shipment pricing works as a result of the pressures on them in terms of space, fuel costs and sheer amounts of parcels now being delivered.
What has also happened is that companies like Amazon have realised its more efficient for them to have less box sizes, and use a larger box with more empty space rather than try to pack what we would call efficiently. The best way to think about this is when you receive goods from Amazon do you notice that often there are ‘packers’ in the box and a big box with not much in it? This is because this is easier for Amazon. Its not easier for the carriers as this space is all taking up room in their vans and planes.
This image from Japan sums up the issue perfectly.
So, in 2014 Logistics Companies are fighting back. They want to pack more densely, and if they can’t then they want to charge appropriately for this. There have been three key announcements in recent weeks around Dimensional Weight based shipping:
- FedEx announced they would be moving to dimensional pricing for Ground and Freight from Jan 1 2015
- UPS announces Dimensional Pricing from Dec 2014 on Ground shipments (is already in place on Air/International)
- UPS Freight announces a move to Density Based Pricing (aka Dimensional Pricing) in a move away from long held Classification Pricing (NMFC codes)
How does it work in Magento?
Right now in Magento there is no support for Dimensional Based Pricing. And its not easy to implement. Why? Because generally a package is made up of more than 1 item. So you can’t just enter dimensions on products like you do with weights and solve this issue. It’s deeper than that.
In Part 2 I’ll go over how we solve this at WebShopApps and in ShipperHQ. In the meantime feel free to contact us or take a look at our Dimensional Shipping Extension if you are in need of a solution today.