November 17, 2015
Are You Ready to Face DIM Charges this Holiday Season?
The holiday shopping season is the biggest season of the year for retailers, and this year is expected to be busier than ever. The National Retail Federation predicts holiday sales will increase 3.7% to $630.5 billion this holiday season, with online sales increasing between 6-8% to as much as $105 billion.
Due to the growth of online shopping and returns, UPS expects to deliver a record number of packages this holiday season. The shipping giant is anticipating to handle over 630 million packages. Dec. 22 is expected to be the busiest day for holiday shipments, when UPS plans to deliver an estimated 36 million packages, an amount that’s double its average daily deliveries.
This is the first peak season that retailers will be impacted by DIM charges, also known as DIM pricing and dimensional weight pricing. DIM charges were announced by UPS and FedEx in May of last year but weren’t implemented until after the 2014 holiday shopping season to give retailers time to adjust. Now packages that are smaller than 3 cubic feet are subject to dimensional weight pricing.
Prior to this change, shipping prices for packages smaller than 3 cubic feet were calculated by the weight of the package. DIM weight takes both volume and weight into account. To determine a package’s DIM weight, multiply its height, weight and length and then divide that number by the DIM divisor. The DIM divisor varies by carrier, but for UPS and FedEx it is 166.
While DIM pricing has been used for air shipments for quite some time, it’s just recently been applied to ground shipments. Under DIM, retail shippers are experiencing an average price increase of 17% to their ground shipping costs, and in some cases prices are increasing as much as 30%.
How will retail shippers be affected during the peak season?
While we can’t know for certain what will happen, it’s safe to assume that those who were hurt by the changes in the first 10 months will experience problems during the peak season, while those who felt little to no affect will make it through the holidays unharmed. With the high volumes of shipments retailers will face over the holidays, those who have felt the pain will feel it 10 times worse.
To minimize the impact of DIM weight and decrease the charges, you need to get rid of empty space from your packaging. Through our research at Packsize, we’ve found that the average package contains approximately 40% wasted space, thus leading to higher DIM prices.
You can eliminate this empty space and reduce your DIM weight with Packsize’s custom packaging solutions. Packsize On Demand Packaging® lets you make custom-sized boxes specifically for the objects you are shipping. With our custom packaging solutions, you can create the smallest box possible and minimize the amount of corrugated and filler material, therefore reducing your DIM charges.
Our packaging solution reduces box volume by about 40%, while also helping you better optimize warehouse space, lessen your environmental impact, and increase customer satisfaction. A package’s contents will no longer be damaged as a result of box size.
To diminish the impact of dimensional weight pricing, contact us at Packsize. Our custom packaging solutions are guaranteed to help you reduce your DIM charges and experience little impact over the holidays.