Increase your revenue with Dimensional Weight Pricing
Dimensional weight pricing ensures that large and bulky items are invoiced according to the space they take up rather than actual weight. In order to maximise revenue, a carrier should compare actual weight with dimensional weight and use the greater of t
IF YOU DON’T CONSIDER DIMENSIONAL WEIGHT WHEN PRICING, AND IF YOU DON’T CHECK THE MEASUREMENTS OF YOUR CONSIGNMENTS AUTOMATICALLY, YOU ARE MISSING OUT ON REVENUE THAT IS RIGHTFULLY YOURS
Customer declared measurements should be checked to ensure that invoices reflect the actual size of each shipment. Revenue Recovery is a term used to describe the protection of revenue through automatic dimensioning.
What is dimensional weight and how is it used?
Dimensional weight pricing was first introduced by international air carriers in order to make efficient use of cargo space. It has become standard in the transport industry and today is used by all major carriers.
The objective of such a pricing structure is to ensure that items are invoiced based on the space they occupy, not just their weight. The dimensional weight of an object is calculated by determining its cubic size and dividing this number by a dimensional factor.
The International Air Transport Association (IATA) established a standard dimensional factor, however companies regularly choose their own factor based on the average density of their shipments.
Dimensional weight exceeds actual weight in a large number of shipments.
If you have a high number of low density items that you price, based on actual weight, there is a huge potential for revenue recovery.
Maximising Revenue Potential
Your exact potential for revenue recovery depends on the goods you ship and your pricing structure. While one company may recover 1 extra per parcel, another company can recover over 5 per parcel. If you send a lot of high volume, bulky products that are low in weight, the potential to recover revenue is much higher than if your average shipment consists of high density objects.
Getting Paid Properly
Not only will you determine the billable weight by weighing and dimensioning shipments automatically, you will also discover any discrepancy in measurements provided by your customer. Shippers often don't have the time or capability to provide accurate data and under-reporting of numbers is common.
If the customer who delivered the example package above mis-calculated the length, width and height by 1 mm, the billable weight would increase by another 14 per cent after discovering the error with an automatic system. Extra revenue gained through this extra quality check is money that would otherwise have been lost.
Why is Automatic Measuring Necessary?
Even if you do measure the dimensions of your freight, but you do it manually, you wonÊt recover all potential revenue. Manual measuring is prone to error.
The logic of an automatic system is based on the space an object occupies and how you can stack it. When an object is not perfectly rectangular, the system calculates the smallest rectangular box that can enclose the object. If the dimensional weight of that theoretical box is greater than the actual weight, it will be used as billable weight. Data provided by a Weights and Measures approved system is always reproducible.
Protect your Revenue and your Brand
No business can afford to just give their services away. If you donÊt consider dimensional weight when pricing, and if you donÊt check the measurements of your consignments automatically, you are missing out on revenue that is rightfully yours. Investment in an automatic dimensioning and weighing solution and a switch to dimensional weight pricing is foolproof.