As use of dimensioning machines becomes more widespread in the LTL industry, a dramatic shift is underway in how shipping rates are calculated. While the impact of this will certainly be felt throughout the industry, there are several steps both shippers and carriers can take to make sure they benefit from the change.
Why The Shift?
Dimensioners (also known as “dimensionalizers” or “pallet dimensioners”) are scanning devices that quickly measure freight-shipment dimensions to more accurately determine their characteristics – and, as a result, their pricing.
Although these machines have been around for several years, the approach is steadily gaining traction in an industry that has historically relied on the National Motor Freight Classification pricing system. The NMFC system, first developed in the 1930s, is based not on the dimensions of the goods to be shipped but rather on four factors: Density, Stowability, Handling, and Liability.
Despite being the default approach for decades, this kind of assessment has been proven to be both antiquated and inefficient – since under these guidelines, it’s not uncommon for a carrier to end up giving away a lot of free room on a truck.
Good News For Both Carriers And Shippers
By measuring a product’s dimensions and calculating shipping costs based solely on how much room the products in question take, there are no misunderstandings about how much a shipper will need to pay.
The very nature of LTL loads means that items aren’t always packed in the most space-efficient way. But costs aren’t always raised to account for this misuse of space. Because of this, the NMFC system adds to a carrier’s costs – and those increases are often passed on to shippers in the form of higher rates.
Dimensioners will also encourage better practices throughout the industry with regards to packaging. Improved packaging and making the most of available space will help reduce the amount of unnecessary waste that ends up in landfalls.
How To Adapt: The Key Is Freight Density
- Step one is optimizing your volume. Since a larger package means a greater dimensional footprint, you should make use of every bit of available space within your packages. See to it that there’s as little empty space in your package as possible.
- Every inch counts – so use the smallest box size you’ll need to safely package your items. If possible, use cartonization logic software (which uses the dimensions and weight of each item to calculate the smallest container size that can safely hold the products) to evaluate the contents of your order and choose the proper number and size of shipping cartons. (It’s worth noting that in addition to reducing your dimensional weight, using the smallest possible packaging yields other benefits as well – specifically, reducing waste and environmental impact.)
- Use packaging materials that are strong enough to not bulge or expand, since those extra inches will be measured. This helps ensure that the dimensional weight will remain consistent. At the same time, to prevent your freight from shifting or becoming damaged during transit, utilize proper securing techniques. (Check out our article and video The Rigors of Freight In Transit to learn more.)
- Use air bags, bubble pack and pouches to provide a cushion to the goods.
- If need be, consider using custom box manufacturing equipment to build boxes that will properly fit your order. You can also get help from your carrier to optimize your packaging.
- Above all, be sure to measure carefully – because ensuring the accuracy of measurements can save you a lot of time, money and headaches down the road. If you’re a low-volume shipper that doesn’t currently use a dimensioner and are measuring each pallet by hand, be sure to measure the maximum length, width and height of your shipments. If you see protrusions on any side, add them to your equation.
- Develop profiles of your freight. By creating “templates” of your most common shipping sizes, you can save both time and money at several steps of the process. The first step in developing a profile is to accurately record the weight and dimensions of every shipment you send over a set period of time. (For instance, four to five months.) Then identify the sizes and weights you use most often, and see how you can more efficiently pack them for maximum density. This gives you a freight “profile” that you can send to carriers for faster, more accurate quoting.
The Tide Is Turning.
By removing the need to measure freight by hand – a process that was often as slow as it was inaccurate – dimensioners are allowing carriers to measure and catalog thousands of shipments a day with pinpoint accuracy. As more and more carriers begin to implement them throughout the LTL industry, density-based pricing will gradually become the industry standard. Which is a good thing.
“Density-based pricing makes it easier for a shipper to compare the relative costs of his small package and LTL shipments,” says Geoff Muessig, Senior Vice President with Pitt Ohio in an interview with Transport Topics. “The growth of the e-commerce revolution and accompanying need for more last-mile delivery services may impel more LTL carriers to embrace density-based pricing.”