If you are shipping less than a truckload of materials, traditionally you will be charged based on a formula based on the weight of your load and the distance it will travel.
But some of the world’s biggest shippers — including FedEx Freight, YRC Worldwide, Old Dominion, Saia and others — currently are developing a more advanced rate calculation method that takes into account the actual dimensions of a shipment.
Known as “dim” machines, these dimension calculators already are being tested and may soon be introduced into the freight market. When they are, it could revolutionize the less-than-truckload (LTL) sector, according to Joel Clum, president of Carrier Direct a trucking consulting firm.
The current weight-based and freight classification system that has been in use since the 1930s is outdated and needs to be replaced by the “dim” approach because it is easier to understand and easier to automate, Clum told Logistics Management.
The LTL sector may be ready for change. Unlike the full-truckload industry, which has many different carriers to choose from, there are relatively few LTL carriers in the marketplace. The top six carriers handle more than 50% of all freight.
With LTL as with trucking, the problem is with capacity. LTL shipments that are lightweight yet bulky tend to “cube out” before they “weigh out” in a traditional 53-foot trailer graded to carry 80,000 lbs. Under the current fare structure, there is little penalty for shippers who ship packages that have lots of air space and take up lots of room, but only pay for their overall weight. For example, 20 lbs. of toilet paper costs the same to ship in a 10’x10’x10′ box as it does in a 25×25’x25′ container.
But if shippers adopt dim pricing, that could all change. That, in turn, probably would force companies shipping materials to reconsider their packaging materials so that they were cheaper and more efficient to ship.