Dimensional Scanners & Density-Based Pricing

Written by Neal Willis
     

Carriers aren’t terribly fond of light-weight freight that takes up a lot of space. It costs more to ship and, August25th_Medium_Box_Dimensionsquite frankly, it costs the carriers more to handle, therefore it’s less profitable for them. With rising equipment costs, a severe shortage of qualified drivers and mounting government regulations, carriers are increasingly scrutinizing their networks for costing and efficiency improvements to help contain rising service costs without compromising quality of service. Identifying inaccurately labeled shipments to ensure that carriers are applying the appropriate pricing and rates is a key component of an efficient carrier network. To help maximize capacity utilization rates and network efficiency, carriers have begun using dimensional scanning machines for identifying
detailed freight characteristics.

Dimensional scanners are machines that scan, identify and calculate detailed shipment characteristic information based on an individual shipment’s weight and measurements. They give carriers the ability to obtain real time information on a shipment such as its density with minimal effort and cost, which affords carriers the opportunity to closely monitor shipment characteristic changes. By using these machines, carriers can easily identify cumbersome and costly freight. They also give carriers a better understanding of what’s moving through their networks, which allows them to formulate better pricing models more closely aligned to service costs.

Like random security checks at airports, to verify shipment accuracy carriers perform random weight and inspections on shipments. When performed, these inspections require additional handling beyond the norm, which is an added cost of service to a carrier. These inspections are necessary, however, because in addition to accurate weights and measurements, they help carriers verify proper commodity classifications. In the past, carriers have relied heavily on a shipper’s word along with random weight and inspections for ensuring that shipment information is accurate and up to date. These dimensional scanning machines reduce the amount of time and cost necessary for performing inspections and are allowing the carriers to check more shipments than ever for accuracy with minimal investment.

In general, dimensional (volume) weight is calculated by dividing the cubic measurement of a shipment by a predetermined factor (number). Historically speaking, LTL freight has been priced based on mileage, weight and commodity class. The different freight classes that presently comprise the NMFC classification system are already based partly on the density of the commodity. Rather than pricing shipments according to August25th_HiResseveral characteristics, dimensional scanning machines are also somewhat symbolic of the shift to a more granular pricing approach being taken by carriers, which focuses on capacity utilization and detailed, customer specific pricing based largely on one characteristic: shipment density (dimensional weight).

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