July 5, 2010
Every shipping department and mailroom needs a measuring tape and a scale. The reason is that in order to calculate the correct postage or shipping charges, you have to know the DIM factor.
A DIM Factor is an acronym for Dimensional Weight Factor. It is a mathematical factor for calculating the dimensional weight of a package. UPS, FedEx, DHL, the US Post Office, and some regional carriers use dimensions as a factor in determining the cost to send a package. For example, the USPS has a DIM factor of 1 cubic foot or 12″ x 12″ x 12″. If a package exceeds a cubic foot in volume, instead of the weight of the package, they use the volume of the package to rate it.
Here are the steps for a 12 ” x 12″ x 13″ package:
- Multiply 12 x 12 x 13 = 1,872.
- Next, divide the total by 194. 1,872/194=9.65.
- Round up the result to the next whole number to get the dimensional weight of the package. 9.65 = 10 pounds.
- If the dimension exceeds the actual weight, you would use this number to calculate the shipping charges. So, in this case, even if you had a 5 pound box, (which is what happened to me) you will be charged for a 10 pound box.
For more information on how USPS calculates dimensional rate, click http://www.usps.com/prices/USPS_prices_dw_pop.html
For UPS, click http://www.ups.com/content/us/en/resources/prepare/dim_weight.html#How+To+Measure+the+Cubic+Size+of+Your+Package
For the FedEx dimensional weight calculator, click http://fedex.com/be/tools/dimweight.html
For the DHL dimensional weight calculator, click http://www.dhl-usa.com/IntlSvcs/dimweight/dimweight.asp?nav=Inttools/DimWeiCal
The USPS has a different factor than UPS and FedEx for domestic packages. You should compare rates between carriers based on package dimensions. For USPS, if the result exceeds 1,728 inches, you must use the dimensional weight. For UPS and FedEx, if the result exceeds 5,184 inches, you pay the dimensional weight.
Domestic is different than International. Here are the current factors:
- Domestic you divide by 194
- International you divide by 166
September 19, 2009
Warehouses that ship small parcels are different than the other types of shippers that I have discussed so far. They ship a much higher volume of packages, from hundreds to thousands of parcels a day. They can be manufacturers, distributors, or third-party logistics companies (3PL). A 3PL is a company that provides outsourced logistics services (more about 3PL’s in a future post).
Small parcels are packages that weigh less than 150 pounds and are typically shipped with UPS, FedEx, DHL, Regional Carriers ( Lone Star Overnight, Eastern Connection, OnTrac,), and the US Post Office. Parcel shippers may also be Less-Than-Truckload (LTL) shippers or full truckload shippers. The way parcels are processed is very different than LTL shipments. Each parcel has a separate tracking number and label. A LTL shipment is usually a pallet with many boxes and shrink-wrapped. The pallet is shipped as a single unit.
Companies that ship small packages send them directly to consumers (business to consumer or B2C) or to businesses (B2B).
Examples of B2C shippers include the following:
- books (Amazon.com)
- apparel and accessories(LandsEnd, Zappos)
- gift baskets and mail order (Harry and David)
- sporting goods (Callaway, TaylorMade)
- electronics (Best Buy)
- medical supplies (Liberty Medical)
- computers (Dell, Apple)
- drugs, vitamins (CVS,GNC)
Examples of B2B include the following:
- industrial supplies (Grainger)
- pharmaceuticals (Merk)
- automotive supplies (Michelin)
- office supplies (Staples)
- fasteners, bolts, rivets (Fastenal)
- electrical components (Westinghouse, Allied)
- industrial valves (Asco, Kingston)
- industrial chemicals (Dow, BASF)
Because of the sheer volume of packages that a typical warehouse sends, these shippers tend to be very sophisticated. Throughput and accuracy are the most important attributes that they look for in processing. Features that warehouse shippers look for include the following:
- Multiple user processing
- Integration with Enterprise Resource Planning (ERP) or Warehouse Management Systems (WMS)
- Business rules
- Error checking
- Mode optimization
- Integration with material handling systems, such as conveyors, scales, label printers
- International processing capabilities
I will be discussing many of these software features in future posts, so stay tuned.
August 8, 2009
The fifth category of parcel shippers is an Internet Retailer. This could be a SOHO with a website that markets products over the internet or a power seller on eBay. It could also be a retail store that also markets their products online. The difference here is volume. Internet Retailers ship every day. Volumes can range from a dozen packages to a hundred plus parcels a day. Technology becomes critical to making their lives easier. They utilize programs like Blackthorne Pro, Auctiva, and Channel Advisor to automate their auctions, images, orders, and fulfillment. When it comes to shipping, technology that can increase productivity is important. The following are features and functionality that appeals to Internet Retailers:
- Internet Retailers want shipping functionality integrated with the software that they use to process orders. They don’t want to have to type or cut and paste shipping addresses from one software program into another.
- The ideal shipping technology provides the most cost effective service and carrier for each package. This can be accomplished through business rules or comparing prices based on delivery requirements.
- The capacity to ship with multiple carriers. These shippers realize that no carrier is the least expensive in all categories. They want to be able to ship with several carriers. They need to print USPS First Class, Priority Mail and Media Mail labels with Delivery Confirmation. They want PC Postage capabilities and also need to be able to ship packages via UPS, DHL, and FedEx.
- Technology that can cut costs and eliminate errors is valued such as features like address validation and checking whether or not an address is a residence or business that can reduce accessorial charges.
- The ability to ship parcels to international locations is essential.
- Batch processing is indispensable. Internet Retailers want to be able to produce shipping labels in mass rather than one at a time.
- The capacity to have multiple users is significant; this is the first category that may have employees to help in the shipping process.
- Tracking of packages is important to this segment; they are committed to customer service and want to easily respond to customer inquiries; they want to know when a package was delivered.
- Internet Retailers also want to pro-actively notify their customers when a package has shipped, the carrier, and the tracking number. They want shipping software that can send an email automatically to a customer with all the details.
- Finally, the Internet Retailer wants reports on shipping volume, average weight per package, average cost per package, dollars spent for each service and carrier, and so forth.
November 13, 2008
Some people are sour that DHL is shutting down their domestic ground and express operation in the U.S.
Can lemonade be made out of this lemon?
According to John Mullen, CEO of DHL Express, in early 2009, DHL will introduce their first deferred international (day definite shipping) product for U.S. customers, named Economy Select International. If this product is priced right, it could be a great option for shippers wanting an economical way to send their product internationally.
In addition, DHL Express will introduce time definite Express products from the U.S. with 9AM and 12 noon delivery to select destinations internationally.
DHL’s commitment is to focus on their core competence, international shipping. According to Mullen, “DHL will offer the latest pickup and the earliest delivery times into and out of many U.S. major metropolitan areas for international shipments and will continue to have a strong presence in the U.S. coupled with an unparalleled global network.”
Let’s hope that DHL will make shipping international more competitive with more options, better service, and lower prices.
October 25, 2008
If you ship packages internationally, you need to know about the new regulations that went into effect on of October 1, 2008.
The US Census Bureau now makes it mandatory to electronically file your export information.
Paper submissions will be a violation.
Is your shipping system compliant?
Many shipping systems will let you ship a package internationally without warning you about the new rules; you could unknowingly violate the regulations.
If you have not received an upgrade recently, check with your shipping system vendor now. Make sure your system is helping you avoid making a serious mistake.
The new law carries tougher penalties for non-compliance.
Penalties, both civil and criminal, may be imposed per violations from $1,100 to $10,000 for delayed filing, failure to file, or false filing of export information.