Blog Posts What Does USPS’ New Dimensional Pricing Mean for My Business?
The impact of Dimensional (DIM) weight has increased by 33 percent in the past five years, according to PARCEL magazine. And if you routinely ship larger, lightweight packages, expect even greater increases when new USPS changes go into effect later this month.
DIM Changes Impact Packages Over One Cubic Foot
Commonly used to determine the price of lightweight packages, DIM rates are based on package density. DIM weight is calculated by multiplying the length, width and height of a package and dividing by a predetermined divisor.
On June 23rd, the USPS will be changing their divisor and extending DIM weight to Priority Mail and Priority Mail Express for packages larger than one cubic foot. (Packages that don’t exceed one cubic foot in volume will continue to ship by actual weight.)
The change will have the most impact on companies that ship lightweight products in large shipping boxes. Think pillows, paper towels, hula hoops… You get the idea.
If your products fall in that category, you’ll want to explore available opportunities for optimization. Soon. Strategies include:
- Packaging assessment. Analyze package weight, cube information, shipping frequency, etc. Is your product packaged as compactly as possible and shipped in the smallest possible container that will protect it in transit? Even minor adjustments to package size can result in significant savings.
- SKU analysis. Review the products you’re shipping and analyze any small, low-margin items that will become more expensive to ship. You’ll need to decide if they’re worth keeping in the line-up.
- Carrier selection. Since Priority Mail and Priority Mail Express shipments will be impacted, consider whether you need to continue offering that level of service. If so, will you absorb the cost or pass it on to your customers? Ground service can be a viable alternative for timely deliveries if you have strategically located distribution centers.
Need help determining what the new pricing means for you? An experienced fulfillment provider can be a valuable resource as you look for ways to optimize your shipments. They can analyze key variables such as package weight, cube information, shipping frequency, etc. to minimize the impact of dimensional weight rates. With extensive expertise and knowledge of best practices, they can recommend ways to increase packaging density efficiency in order to be more cost-conscious. They can also recommend the optimal network configuration to meet your parcel shipping needs.
To learn more about DIM rates and other parcel shipping challenges, download our whitepaper: The Rising Role of 3PLs in Parcel .