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Dimensional Pricing is Here to Stay

It's been said before, but size matters – particularly on less than truckload (LTL) trucks moving freight from point A to point B. Gone are the days when poorly packaged freight would take up precious space on a carrier's truck.

Dimensional pricing is the new name of the game, with UPS and FedEx adjusting rates in 2015 to accurately reflect prices based on dimensions for all packages, even historically exempt packages of less than three cubic feet. With these traditionally parcel carriers making aggressive moves into the LTL space in recent years, it's likely there will be a trickle-down effect toward dimensional pricing across the board.

Source: FedEx

Source: FedEx

No one likes to pay for something that was previously free, but shippers need to recognize that the free ride for poorly packaged freight is ending, and instead of seeing dimensional pricing as an immediate hit to the pocketbook, they can look at it as an improvement in carrier service and accountability.

Both the shipper and carrier have the same end goal – get the goods to the end user on-time and damage-free. Carriers have a set amount of available space in their fleet, and they should be properly compensated to move goods based on that valuable space in terms of both weight and size. Dimensionalizing freight is the solution to maximize the available real estate of a truck.

Filling a truck as full as possible makes sense from any perspective, but dimensional pricing strategy is feared in the shipper community, mainly because of the perception of higher prices. It's true that rates increased for some shippers with the move to dimensional pricing for UPS and FedEx, but dimensional pricing comes with a very important, overlooked benefit: it levels the playing field and sets transparency, paving the way for stronger relationships between shippers and carriers.

When freight is properly identified, packaged and measured from the start, both the shipper and carrier will know exactly how much space they need on a truck. Freight can then accordingly be priced correctly, eliminating the need for later pricing adjustments downstream, which can result in a delay of goods to the end customer.

With dimensionalized freight, both shipper and carrier are on the same page, with 100% transparency in pricing. When trucks can move more freight based on accurate packaging dimensions, carrier pricing will adjust and normalize accordingly with the potential for savings down the road. When shippers are accountable for properly packaging freight, boxing sizes will decrease, enabling positive environmental impacts.

Dimensionalizing freight can be as simple as using a ruler or tape measure to determine length, width and height of a box. For shippers moving more freight, investing in a Dimensioner or using a carrier who provides this service will be the path forward to meet the inevitable future of dimensional pricing.

SHIFT Freight has used a FreightSnap dimensioner since 2013 with phenomenal results. The dimensioner is quick and accurate, calculating cubic density and generic NMFC density class for both irregular and cubic freight. Dimensioning freight ensures every piece of data related to freight is accurate before the freight moves.

With this move by industry giants FedEx and UPS, it's apparent the writing is on the wall that dimensional pricing is not only here, but will become industry standard. If shippers are concerned about increased prices, they can choose to move their freight with alternative carriers, but it will be merely kicking the can down the road, and possibly sacrificing service for price. The better alternative is to accept and embrace the changes, and refocus efforts on efficient packaging for the size of their freight – it matters.

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