Dimensional weight pricing in transportation and logistics: US shipper knowledge and best practice responses in the e-commerce era

James A. Kling and Jack T. Ampuja

International Journal of Logistics Economics and Globalisation, 2018, vol. 7, issue 2, 170-185

Abstract: With the rise of e-commerce, a large number of shippers are experiencing increased logistics costs due to dimensional weight pricing. 'Dim weight' pricing calculates a ratio of package volume to weight in order to penalise low density shipments by charging higher rates. This paper explains the methods and rationale of dimensional weight pricing by parcel and LTL carriers. The results from a survey of over 100 US shippers is presented to better understand shipper knowledge and responses to dim weight pricing and to document increasing shipping costs. Shippers were also asked to identify best practices in packaging and negotiations that were used to counter these increased logistics costs. The implications of this rate practice on supply chain costs and practices in e-commerce are discussed; the most serious impact is on manufacturers and distributors of low density products and those unable or unwilling to invest in technologically sophisticated solutions.

Keywords: e-commerce; electronic commerce; dimensional weight; packaging; parcel; logistics; transportation; shipping density; small package shipping; fulfilment; less than truckload; LTL; freight pricing; dim weight. (search for similar items in EconPapers)
Date: 2018
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