Shipping is more complicated today than ever before. The adoption of dimensional pricing based on size (or cube) of shipping containers has been a game-changer for the industry.
But many companies have been slow to adjust their packaging operations to address the new reality. Lack of expertise doesn’t have to be an obstacle: find a good partner and start cutting costs.
Why Dimensional Pricing is the Industry Standard
Air freight relied on dimensional weight pricing for years, because the amount of space available on planes was a more important factor than the weight of the parcels carried.
For ground transport, traditionally, weight was a more important factor in cost as the sector was largely defined by business-to-business delivery to a limited number of destinations.
The explosion of e-commerce changed everything.
As more and more lightweight packages have entered circulation, ground carriers have been forced to contend with the problem of space — not simply weight.
The solution: dimensional pricing.
Dimensional Pricing Affects Your Bottom Line
Dimensional pricing means that shippers are now paying for space on the truck, not just the weight of parcels. So inefficiencies in your packaging directly affect your transportation and delivery costs.
Two main factors lead to higher dimensional pricing:
- Packaging that is too large – when you stuff your packages with “air” and filler material, you are spending money on that wasted space.
- Poor configuration – arranging products in a configuration that leads to a higher volume and, therefore, dimensional weight. Flatter is often better, but each configuration should be based on the specific products being shipped.
Companies that we’ve helped to revamp packaging operations through our Packaging-as-a-Service model have not been as impacted by the new pricing scheme.
But businesses that continue to ship inefficiently will likewise continue to see higher and higher costs of delivery. This is the kind of business-killing inefficiency that you simply cannot afford to overlook.
Packaging efficiency can lower or eliminate dimensional pricing costs.
Knowing how to optimize your shipping operation to lower your costs can seem daunting, but it is an area of your business you can no longer afford to ignore.
We anticipate that carriers across the industry will continue to employ more sophisticated ways to evaluate the efficiency of shipments and penalize inefficient shippers with higher and higher prices.
At IQpack, we partner with you to ensure your packaging operation is working cost-effectively. Through packaging optimization, our comprehensive supply chain expertise, and our proprietary PACKCHAIN technology, we help you lower your total supply chain cost while improving your customer’s experience.
Contact us to learn more about Packaging-as-a-Service and our unique performance-based approach.
