08 Sep What does it really weigh? Freight Cost Explained
You go online and you find something perfect – perfect. It’s exactly what you have been looking for and the price is amazing. You add it to your cart and click “Check out now” and discover the freight cost (shipping charge) is more than the item! What?!? How can that be? It all comes down to size and weight. It may not be the actual weight of the item that you are being charged for. More likely, especially on larger items, you are paying what is called the Dimensional Weight or Volumetric Weight.
Dimensional Weight is an estimated or theoretical weight for a package based on the height, length, and width dimensions. The dimensional weight assumes a minimum density for all packages. This is because when calculating shipping charges on weight alone, large packages that don’t weigh very much are not profitable for the transportation company. They are not profitable since they take up a lot of physical space. The minimum density will be set as a standard density by the freight carrier.
When calculating dimensional weight freight carriers will determine the dimensions of the package. Package dimensions will often be based on the largest dimension. A box that is 20″ x 20″ x 2″ has an actual volume of 800 cubic inches. If the carrier determines the space the package will take up based on an actual cube that box would be estimated to be 20 x 20 x 20 or 8000 cubic inches.
When calculating the cost of a shipment freight carriers will take the higher of either the actual or theoretical weight. This would be shown as the billable weight on a freight price estimate.
Maximize Freight Cost
So, how do you maximize freight cost to get the most out of your shipping? It is all about density. A package with a higher density will better utilize the volume allocated. When ordering it is best to keep your items packed together as tightly as possible. Some common ways to do this include nesting items together, packing parts inside larger items, and taking advantage of the entire pallet you are shipping. It may also be prudent to group your orders together (order office supplies for this quarter and next quarter) if you are able to forecast your usage and have the storage space for the extra units. Larger orders will maximize your shipping costs on a per unit basis if you are able to maximize the volume and dimensional weight.
Let’s look at an example. We compared the shipping prices for 1, 8, and 16 document destruction carts. The freight cost for one cart is the same as the freight cost for 8 carts and for 16 carts. Therefore, we see the impact of density and the importance of fully using the allocated space to maximize per item costs.