Written by Rob Zaleski on parcelindustry.com
When it comes to shipping costs, much of the conversation revolves around package weight and destination. The heavier it is, or the further it travels, the more it will cost a business to ship — or so they think. However, large, lightweight packages can actually cost more to ship than some smaller, dense packages, thanks to dimensional weight (DIM weight). DIM weight is used by USPS, FedEx, and UPS. It bases the cost to ship a package on the amount of space it would take up on a truck or plane, as opposed to the actual physical weight of the package. Dimensional weight is calculated differently by USPS than it is for FedEx and UPS, and that difference can have major impacts on your shipping costs.
How UPS and FedEx Calculate DIM Weight
DIM weight applies to every size package for FedEx and UPS. To find this, you need to use the (Length x Width x Height) / 139 formula. For example, let’s say you have a 16” x 12” x 10” package that weighs eight pounds. Multiply those dimensions together, and you get 1,920 cubic inches. Use the 139 divisor, and your new “weight” is 14 pounds. Those extra inches nearly double your weight, and since the carriers use the greater of the two weights to determine the costs, the price just went up. This is especially problematic when you’re shipping hundreds or even thousands of packages.
How USPS Calculates DIM Weight
USPS only charges dimensional weight on packages that exceed one cubic foot (1,728 inches). It also uses a more merchant-friendly divisor of 166, which turns the dimensional weight of our above example to 12 rather than 14 pounds. That being said, the additional costs can still add up quickly.
The above examples show the importance of not only optimizing your packaging to fit the product as closely as possible, but also the importance of a multicarrier approach. Simply defaulting to a single carrier can cost you significantly, particularly with dimensional weight. There are times when USPS will be substantially cheaper than UPS and FedEx, and instances, like the above, when it is not.
Carrier Packaging vs Your Own Packaging
Each carrier has packaging that can be used for specific services they offer. You can order these supplies from their websites or web portals, and in the case of USPS and FedEx, they’re free and will be delivered to your home or office. Some of these products, such as Priority Mail Flat Rate, can be ideal for heavier items as they ship for one cost up to a certain weight (20 pounds in the case Priority Mail Flat Rate).
Flat Rate Shipping
All three carriers now offer flat-rate shipping options, which offer a single rate that doesn’t change based on weight (up to certain maximums), and in some cases, distance traveled. A benefit of flat-rate shipping is the time savings of not having to weigh or measure packages, so long as you know they fall somewhere in the necessary ranges. It can also help you budget your shipping costs better and, in the case of FedEx and UPS, you don’t have to worry about surcharges (USPS does not apply surcharges to any services).
UPS released Simple Rate back in November 2019. It differs from the other carriers’ options in that it doesn’t require carrier-provided packaging. You can use your own, which can be convenient if you ship products that don’t fit neatly in the provided boxes.
FedEx offers One Rate as their flat-rate shipping option. FedEx is the only carrier that offers a range of flat-rate box products with guaranteed overnight delivery, so it is certainly worth looking into if you have time-sensitive products.
USPS has the above-mentioned Priority Mail Flat and Regional Rate (online only), which takes distance into account, but is the same up to a maximum weight (depending on one of two box sizes). The latter is ideal for heavier packages that aren’t traveling far.
Flat-rate shipping provides time and cost-savings without the headache of measuring individual packages. It still can’t be a default, though. Similar to weight-based shipping, you should compare and contrast. In certain instances, flat-rate shipping may cost more than weight-based versions.
Between carrier and service, package type, size, and materials, there are numerous ways your packaging could cost you more to ship. With some attention to detail and a multicarrier approach, you could put more money back into your bottom line and turn shipping into less of a sunk cost for your e-commerce business.
Rob Zaleski is Head of Brand for ShippingEasy, the easiest online shipping, inventory, and email marketing platform for growing businesses. With ShippingEasy, merchants can access discounted USPS and UPS shipping rates, automate shipping, and get time back to focus on their business.ShippingEasy recently released a free in-depth guide (https://shippingeasy.com/flat-rate-shipping-guide/) that compares and contrasts the various carriers’ options, as well as compares flat-rate shipping options to appropriately-sized weight-based counterparts.