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Author Archives: Daily 3pl Fulfillment

  1. Calculating DIM Weight

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    Having an accurate dimensional weight can make a substantial difference in the cost of commercially shipping products for distribution and sale. E-commerce businesses, retailers, and manufacturers benefit from working with a fulfillment or logistics services provider that can stay on top of accurate dimensional weight calculations. Learn more about what dimensional weight is, how and why it’s calculated, and how it can impact your business.

    What Is Dimensional Weight?

    Dimensional (DIM) weight is a factor that influences the overall cost to ship a package. Commercial freight transportation services need consistent techniques for calculating the load—and resulting price—of a shipment. Most shipping providers use both weight and DIM weight in their pricing process. Dimensional weight is calculated by multiplying the load’s width, length, and height, then dividing it by the carrier’s DIM divisor. For example, a package shipped with FedEx (which has a DIM divisor of 139) that is four feet wide, five feet long, and three feet high would have a DIM weight of about 0.4317 pounds.

    Freight companies, including both couriers and postal companies, use dimensional weight to account for the space the cargo will take up in a truck or cargo container. Measuring by weight alone doesn’t account for how a large but light shipment will take up much of the available space. Likewise, calculating only weight for heavy but compact cargo will lead to unused space. Instead, companies calculate dimensional weight and determine the density of the load to provide pricing and accurately judge transportation requirements. As a manufacturer or distributor, you also benefit from knowing your cargo’s DIM weight through independent assessment.

    Why Is Dimensional Weight Important?

    Logistics companies and freight service providers can more efficiently provide services and assign costs when they know more about the cargo they’re shipping. DIM weight is important because it provides three key advantages:

    • For customers: If a shipping company uses DIM weight to calculate shipping costs, you can save money by more efficiently packing your shipment. Efficient packaging reduces the dimensions of each unit, allowing you to fit more within a standard space.
    • For shipping providers: Both true weight and DIM weight are necessary to calculate shipping costs, but the greater value is used in the actual billable amount. DIM weight pricing allows organizations to standardize pricing costs and operate more efficiently. This ensures greater customer satisfaction because it establishes consistent, competitive pricing and simplifies logistics management for large shipping organizations.
    • For the environment: Calculating pricing according to DIM weight incentivizes efficient packaging, reducing overpacking and waste from excess foam, plastic, and cardboard materials. Shipping organizations can also use transport vehicles as efficiently as possible, reducing fuel consumption and lowering overall fuel emissions.

    Because of its environmental and efficiency benefits, dimensional weight will continue to be an important factor to calculate shipping costs for all stakeholders involved.

    How Is Dimensional Weight Calculated?

    There are three key numbers involved in any company’s pricing assessment: true weight, dimensional weight, and billable rate. Here’s the simple process for determining each one:

    1. Actual (or true) weight: Use a standard scale to weigh the cargo.
    2. Dimensional weight: Measure the length, width, and height of the cargo, and then multiply them together. You can measure in either pounds or kilograms.
      1. Pounds: Measure the dimensions in inches, and then divide the final product by 139. Round up.
      2. Kilograms: Measure the dimensions in centimeters, and then divide the final product by 5,000. Round up.
    3. Billable weight: Identify the higher number out of the actual weight and the dimensional weight. Shipping companies will use this number to calculate the shipping cost.

    Partner With Daily 3PL for Consistent Shipping and Logistics Support

    With this insight into how shipping companies determine your bill, you can better strategize your packaging and shipping efforts to minimize costs and material waste. At Daily 3PL, we’re here to help organizations seamlessly navigate complex shipping and logistics processes, including dim weight calculation. Contact us today for more helpful insights or to learn more about our capabilities.

  2. Backorder vs. Out of Stock: What’s the Difference?

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    In the world of retail and e-commerce, these terms are often used interchangeably, but they actually refer to two distinct inventory situations. Backorders occur when a customer places an order for a product that is currently out of stock but that has a determined restocking date, while an out-of-stock item simply means that a product is not currently available for purchase and does not have a resupply date. In this blog, we will dive deeper into the definitions of these terms, the differences between them, the benefits of accepting backorders, and the causes behind these inventory management problems.

    Back Order vs. Out of Stock

    While both terms mean that a product is currently unavailable, the differentiating factor between out-of-stock products and products on backorder is that back-ordered products are only temporarily unavailable

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    What Does it Mean When an Item is on Backorder?

    A back-ordered product refers to an item that is temporarily out of stock but will be returning to inventory shortly. Typically, a manufacturer has not yet produced the product but intends to deliver the item as soon as it becomes available again.

    Consumers who purchase an item on backorder from an eCommerce site will receive the product as soon as it returns to stock. If a SKU is on backorder, the consumer is essentially pre-ordering a temporarily unavailable item.

    When an item is on backorder, it guarantees the product will be available on a predetermined date. While shipping will take longer than normal, it will still be delivered once the item comes back in stock.

    Out of Stock

    If an item is out of stock, a consumer cannot place an order for that particular item. There is no current inventory, and a projected date for future availability does not exist. There is no guarantee the product will ever be resupplied.

    The time limit for an out-of-stock item is indefinite and can fluctuate without notice. Since consumers cannot place an order for out-of-stock items, it generates a loss of revenue, which can be significant in some cases.

    Causes of Backorders

    Even though backorders are not ideal, they are sometimes inevitable. There can be supply chain shortages, weather disruptions that can stall transportation, and an unusual increase in demand for the product.

    Other common causes of an item going into backorder status can include the following situations:

    • Low safety stock
    • Manufacturer or supplier problem
    • Human error
    • Inventory and warehouse management discrepancies
    • Long lead times

    Benefits of Accepting Backorders

    Retailers have the option of marking a product out of stock or accepting backorders, which can provide the following benefits:

    • Product demand
    • Improved customer relationships
    • Less inventory storage cost
    • Improved cash flow

    Contact Daily to Learn More About 3PL Fulfillment

    If you are frequently dealing with out-of-stock or backorder inventory issues, we can help. Daily 3PL helps clients connect with buyers as a third-party logistics partner. We offer quick, affordable, reliable fulfillment services with data-enabled logistics from our warehouse in Southern California.

    We save you money through pre-negotiated discount rates with preferred carriers and show you how to increase the average order value by removing operational friction and reducing canceled orders.

    Contact us today to learn more about the fulfillment services we offer.