10 Reasons to Consider Dimensional Weight for Improving Revenue

10 Reasons to Consider Dimensional Weight for Improving Revenue

Any veteran of the cargo industry knows that dimensional weight has been adopted by the transportation industry nearly worldwide as a uniform means of establishing a minimum charge for the cubic space a package occupies. Yet the practical realities of measuring and calculating dimensional weight often overshadow the potential benefits. Tight cutoff times, additional security requirements and precise manpower budgeting all push dimensional weight to the back-burner.

The concept of dimensional weight is more timely now than ever. Using “scale” weight alone as the basis for setting rates makes lightweight, low-density packages less profitable because of the space they take up in the truck/aircraft/ship in proportion to their actual weight. With the cost of fuel and security compliance adding to the expense of carrying cargo, integrating “dimming” — the process of collecting measurements of a shipment and then calculating the dimensional weight to compare it to gross weight — into daily operations is a way to increase revenue and keep cargo operations profitable.

Here are 10 reasons to consider dimensional weight for improving revenues.

1. The opportunity is significant.
Many cargo facilities have not collected data on the value of dimensioning weight for their operation, and have discounted it as a potential revenue source accordingly. Our field data for air cargo indicates that an average of 18 percent of total shipments should be charged by dimensional weight in addition to what was originally tendered on the shipping waybill. That 18 percent will yield an average of 37 percent of additional chargeable weight, which can translate into substantial additional revenue. We have seen a single facility with international outbound cargo losing almost $1.9 million annually from not dimming their shipments.

2. Higher chargeable weight is bottom-line revenue.
One of the most valuable aspects to dimensional weight is the fact that it is revenue generated without any additional marketing expenditure. Cargo operations can realize bottom-line revenue without acquiring new customers or booking additional shipments.

3. You don’t need to “dim” all cargo.
Manually measuring 100 percent of shipments can be difficult with time and personnel constraints. “Dim” a smaller percentage to capture at least some revenue gains. All cargo facilities work with a certain number of repeat shippers who ship heavy contents. Live fish, auto parts, printed materials are all examples of shipments that can be automatically excluded from any dimming process. These distinctions, communicated to warehouse personnel, can reduce the number of shipments considered for dimming and make dimensional weight more approachable.

4. There are simple methods to finding the revenue.
Create a dimming guideline that can be used on the floor to quickly ascertain if a shipment will have a higher chargeable weight from dimensional weight. This includes making a chart of general dimensions so that floor personnel can take overall dimensions of a shipment and quickly look up dimensional weight. If the dimensional weight is higher than scale weight, that shipment can be taken to a staging area and broken down for individual “dims.”

5. Use new technology to make it even easier.
Previous technology solutions may not have been effective, but advances made in recent years are bringing many interesting new products to the market. Capturing dimensional information is a pain of the industry that has being waiting for a practical solution for years, and several companies have been working diligently on the problem. Don’t discount what they have to offer just because something that was tried five years ago didn’t meet the needs of your operation.

6. At least “dim” international shipments.
Given the rate differential between domestic and international shipments, every cargo facility should at least “dim” 100 percent of international shipments. Even a slight increase in these shipments yields good results.

7. Incentivize your handlers and they will find the revenue.
Many airlines are now working with general handling agents to receive, accept and load their cargo. Agreements with these agents often call for dimming of 100 percent of shipments, despite the fact that the reality of warehouse operations makes it impossible to manually “dim” all shipments. The operations where we have seen the best results are those where incentives for capturing “dims” are built into the contracts, thereby creating a financial reward for the airline and the handler that justifies the manpower required to collect “dims.”

8. Involve warehouse personnel and they will make it personal.
The other key to increasing revenue through dimming is to involve warehouse personnel. When the people on the floor understand the opportunity to improve business, and they see a direct route for their actions to have an impact on that improvement, we have seen genuine interest and participation. Warehouse personnel don’t often have the opportunity to personally contribute to generating revenue, and if they are included in the context of this aspect of their work, it often becomes more meaningful to them.

9. Accurate dimensions improve load planning.
There is a variety of load-planning software on the market today, and all of it requires dimensions of cargo. As the “garbage in, garbage out” adage goes, the more accurate the dimensions of shipments, the better results these programs will yield. Many cargo operations currently accept dimensions as provided on the bill of lading or waybill, when they are provided, and only verify “dims” when there appears to be a problem loading the cargo. Implementing a workflow process that consistently and accurately collects “dims” will improve this aspect of operations and improve space utilization.

10. It benefits everyone in the supply chain.
Whether you are a shipper who wants an accurate freight quote, a forwarder who wants to avoid back charges, a less-than-truckload operation that needs accurate density information, a sea freighter who wants to maximize less-than-containerload planning or an airline that wants to maximize yields, accurate dimensional weight plays a valuable role in your operation. When everyone in the supply chain utilizes dimensional information, the flow of commerce will improve through more accurate information.

Dimensional weight and density are elements of every cargo operation that have the potential to increase bottom line revenues and improve load planning significantly. Companies that make the effort to integrate dimensional information into their operations will see a host of benefits.