It’s likely not news to you that everything is going up in cost. Running a business is never an easy feat, and in this economic climate, it’s becoming even more challenging to stay afloat and remain profitable.
Fuel is on the up, supply chains are on the brink, and the cost of living crisis is changing customers’ spending habits – there is a lot of uncertainty right now and it can be hard to navigate.
You’re likely looking for as many ways as possible to cut costs without cutting corners, to limit your expenses without limiting your business.
One cost that may feel unavoidable is shipping. Not only is this unavoidable, with no alternative or replacement, but it’s also another expense that’s rising. A number of different shipping providers are upping their prices. DHL Express is just one example, with shipping rates expected to jump by 7.9 percent in 2023.
Other providers, such as UPS and FedEx are also soon to implement 6.9 percent average increases too. Annual price increases are not a new thing, yet the current issues with inflation, currency and rising administrative costs are pushing this increase even higher.
However, there are specific elements that add to this expense that you do have the power to change. In this article, we will learn more about something called “billable weight”.
We will learn what it is and how it is calculated. Additionally, we will consider a few useful suggestions that may help you to save some money when it comes to shipping your goods.
What is Billable Weight?
Billable weight is quite a self-explanatory term – it’s the weight that you will be charged for when you ship a parcel or package.
Shipping providers may vary in how they calculate it, but they tend to use the greater of either the actual weight or the dimensional weight as the billable weight in order to work out how much to charge you for shipping.
This being the case, a lightweight product in a large package would have the billable weight of its dimensional weight, whereas a heavy product in a small weight would be charged by its actual weight.
Shipping providers and carriers use this method due to the fact that they have limited space and weight capacity within their vehicles and this approach enables them to charge for the actual weight and the space it takes up on their truck.
While actual weight is the physical weight of the shipment, the dimensional weight is calculated by multiplying the length, width, and height of the package and dividing the total by the carrier’s DIM divisor.
After gathering the information for both the actual weight and the dimensional weight, shipping carriers will choose the higher value of the two to be the billable weight.
To put this into real, understandable terms, a small package would have a smaller DIM weight but if inside are heavy dumbbells, the actual weight would be a lot higher. The billable weight would be the actual weight, and this is what you would be expected to pay as the shipping cost.
On the other hand, you might have a shipment of very lightweight pillows in a large box. The carrier won’t make money out of sending the package based on its actual weight so, in this instance, the billable weight would be the dimensional weight of the package, how much space it takes up in the truck.
How Do You Calculate Billable Weight?
Shipping carriers will use a specific DIM weight formular with a DIM divisor to calculate the dimensional weight of a package. In order to establish the billable weight of a package, you need to know both the actual weight and the dimensional weight. Follow these simple steps to ensure that shipping costs don’t come as surprise:
- Use a postage scale to determine the actual weight of the package. Round up the measurement to the next whole pound.
- Measure the length, width, and height of the package in inches, rounding up to the nearest whole number. Multiply these dimensions together to get the cubic size of the parcel. Then find the DIM divisor of your chosen shipping carrier and divide the cubic size of the parcel by this DIM divisor. This will give you the DIM weight of the package.
Once you have determined these two weights accurately, you can calculate the billable weight by choosing the greater number of the two.
You can also access online calculators that will help you to determine the dimensional weight of your package and compare the prices of different providers to help you to get the best deal.
Working out which shipping service will give the best prices is not always straightforward, but with a little research and comparison, you will be able to save yourself some money by shopping around. What else can you do to save money on shipping expenses?
How Can You Save Money on Shipping?
Reassuringly there are things you can do to keep your shipping expenses low. Here are two things to think about:
- Review your packaging. If you can, reduce the dimensions of your packages because this evidently has a big impact on what your shipping expenses will be. Additionally, you might not be able to reduce the weight of your product but opt for more lightweight packaging options that will lower the actual weight. Think about ordering your packaging supplies in bulk to keep these costs low too.
- Calculate estimates for your shipping costs. If you can accurately measure your shipping costs, you will be able to expect the expenses and see where you can reduce costs where possible. Use online shipping calculators on various shipping providers’ websites which will give you an up-to-date, accurate estimate of how much to expect regarding shipping costs. When you know exactly how much you’re going to spend, you can reflect these costs in what you go on to charge your customers to make sure you’re not out of pocket.
Additional
