When shipping packages, there are some terms that you should be aware of to lower the cost of your shipment and improve the likelihood of the package reaching its destination.
Many major shipping companies calculate the billable weight to determine the shipping price. If you’ve ever shipped a package, you’ve probably heard of the term billable weight and wondered what it means and how to adjust it to reduce costs.
Fortunately, it’s relatively simple to figure out how to estimate the billable weight of your next package and save a few bucks as a result.
What Is Billable Weight?
Billable weight is used by shipping companies as a pricing guideline. It’s measured by calculating the dimensional or volumetric weight of the package and comparing it to the actual weight.
Dimensional weight is determined by the height, length, and width of the package, which provides an estimation of the package’s weight. The actual weight is the true weight of the package’s contents. Most often, shipping companies will base their fees on whichever weight is greater.
How Does Billable Weight Affect Shipping Costs?
If you place small items in a large box, the dimensional weight will likely be much greater than the actual weight. Thus, you’ll be charged more for shipping. Unfortunately, it doesn’t help matters to place heavy items in a small box as the actual weight of the package will exceed the dimensional weight, and you’ll still be charged accordingly.
While it’s always wise to use the smallest possible boxes for shipping, you still need to account for the actual weight of the items. Your shipping costs are largely determined by the package’s billable weight.
How Does Billable Weight Affect Performance?
Fortunately, the billable weight won’t negatively impact shipping performance. Your package will still get to where it needs to go. You’ll just have to pay more for it.
Your final shipping rate is calculated by dividing the dimensional weight by the carrier’s DIM factor, which sometimes varies depending on whether it’s a commercial or retail shipment. Then, that amount will be compared to the actual weight, and you’ll be charged according to whichever amount is higher. You may also be charged additional fees, such as surcharges for freight and fuel. Larger and heavier packages require more physical labor and could result in oversize charges.
How Can You Reduce Shipping Costs?
The good news is that not only can the DIM factor be negotiated, but you can also often lower your package’s billable weight by using standard-sized boxes, packing more efficiently, and cutting boxes down when necessary.
If you have any further questions about billable weight and reducing shipping expenses, contact us for 3PL in Chicago!