With the decrease in available truck capacity, resulting in a significant uptick in transportation & shipping costs a noticeable trend has appeared within the logistics and supply chain industry - a growing complexity in carrier networks with a diverse range of rate incentives.
In response to these challenges, both shippers and carriers have employed various strategies to mitigate their impact.
Carriers have resorted to raising fees, making shippers explore methods for reducing their costs.
To fight the increasing costs and rate incentives imposed by carriers, shippers often resort to estimating or shifting dimensional data in their favor. However, this approach carries risks and potential pitfalls.
Shipment Delays
When a shipment is picked up and the BOL (bill-of-lading) is coordinated with a carrier, the paperwork serves as a contract between the shipper and carrier, that the information provided on the BOL corresponds to the shipment being shipped – correct weight, correct dimensions, etc.
Since LTL shipments stop at multiple terminals while in transit, the risk of getting “caught” with incorrect weight or freight dimensions stated in the document is much higher.
If a carrier suspects misrepresentation of freight dimensions or weight, the shipment will be flagged for an inspection.
This means that your shipment will be detained which can take time, depending on the volume going through a terminal.
This will cause delays in your shipment(s) and might cause missing delivery deadlines, which can be a significant loss if it is a time-sensitive shipment or holds up freight from other customers.
Additional Fees
When a carrier notices that the dimensions or weight do not match the ones on the BOL, your shipment will be flagged for an inspection. It means that your shipment will have to be re-weighed and re-dimensioned.
This can affect your cost of transportation cost since the key element of determining the cost of transportation is the volumetric weight (a.k.a. dimensional weight). On top of surcharges for incorrect BOL, which are plenty out there from carriers making sure your shipments match their distribution network
However, some carriers use freight classes which are classed based on density. If your weight is incorrect, your density and class may change significantly, which will affect the overall cost of your shipment.
Freight reweighs are becoming increasingly common, particularly now that many carriers worldwide (FedEx and UPS being among the biggest ones) have adopted a dimensional weight pricing model.
Inefficient Space Utilization
Dimensional data is at the base of packing, storing, and shipping operations. When dimensions of your inventory are incorrect you put yourself in the unknown for the cost of transportation (leading back to additional fees), for slotting within your warehouse & for freight loading into vehicles.
Warehouses are designed with specific storage strategies in mind, including bin sizes, shelving configurations, and racking systems. When the dimensions of your inventory are inaccurate or even absent, it can disrupt the slotting process.
Some consequences of bad slotting strategies include:
- A warehouse is running out of space
- Lost or misplaced inventory
- Slow picking times
- Damaged inventory
- Errors in order fulfillment
- Bottlenecks during the busy part of the day
consequently, in full truckload vehicles, the absence of accurate measurements of freight can lead to underutilization of space, which could have otherwise been used to carry more goods, consequently increasing shipping costs per unit.
How To Fight This
The first step is updating the outdated ways of measuring freight, such as measuring tapes, and rulers or guessing the size of freight by looking at similar shipments.
Mistakes are made even when they are not intentional (e.g. misreading a number or handwriting).
Automated Dimensioning Systems
One way to ensure that you as a shipper are charged for what you are shipping and carriers charge for what they are transporting is to make sure that the measurements and weight of your freight are as accurate as possible.
Deploying the most suitable dimensioning systems for your warehouse can greatly benefit in eliminating volumetric weight errors and avoidable shipping fees.
Either static or mobile, automated dimensioning solutions allow you to capture dimensions quickly & accurately.
In the case of mobile dimensioning systems, measurements of boxes or pallets can be retrieved on the fly, as you move through a warehouse and create optimization possibilities with the digital record of your freight.
Mobile dimensioning app in action
Use the digitally retrieved measurements for calculating invoice amounts, creating load plans or just maintaining more accurate master data for your WMS or TMS.
Learn more about mobile dimensioning!