Why The Freight Industry Uses Volumetric Weight
Standard freight pricing is based on weight rather than volume. However very light loads take up much more space than their share of weight load, and would otherwise be unprofitable to ship.
The industry gets around this by imposing a minimum weight based on shipment dimensions. That’s why it’s called dimensional weight, if it’s not being called DIM weight, volumetric weight, volume weight or cubed weight.
A shipment’s dimensional weight is calculated by dividing its volume (units × length × width × height) by a “dim factor”. The lower the dim factor the greater the dimensional weight.
The greater of actual weight and dimensional weight becomes the shipment’s chargeable weight (aka billable weight). Light loads are charged by dimensional weight, heavier loads are charged by actual weight. The threshold depends on volume and the dim factor used.
There are some standards for calculating dimensional weight, but they are not universal for all modes of transport, carriers, countries, or customers.
The 1:6000 vol ratio, 6000 ccm/kg, 166 cu in/lb, 366 cu in/kg is common for IATA shipments. Air freight volume is usually rounded up to the next full or half kilogram.
International express has used dimensional weight for parcels for many years, typically using a vol ratio of 1:5000, which is a dim factor of 139 cu in/lb. Recently some couriers, including DHL, FedEX, UPS and USPS have started using dimensional weight for ground services.
Because LCL has a very low dim factor, a shipment going by LCL will have a higher volumetric weight than if it went by any other mode. This is why almost all LCL cost is dimensional (usually referred to as “per CBM”). Only very dense shipments, like a pallet of batteries, are charged by actual weight.
Paradoxically, LCL is usually the cheapest mode, but only because its lower charges per unit weight more than make up for its higher volumetric weight. Very light shipments are an exception. LCL’s low dim factor (along with a higher indirect cost ratio) usually means that air freight is cheaper.
Most US LTL freight shipment charging uses freight class rather than dimensional weight. Truckers using dimensional weight typically use a 194 or 250 dim factor.