The valuation of a parcel in a courier company is like visiting a clothing store: the more you deviate from the standards, the more trouble you have finding decent clothes at a reasonable price. Extremely thin and tall people, as well as short and bulky ones, and additionally picky customers must have a fatter wallet. It is similar in a courier company: if you use additional services (e.g. special handling of a package or labelling with the “attention/glass” sign), and more importantly, if the package does not fit into the standard dimensions and weight, you will pay more. Both parameters are important, because contrary to what intuition suggests, for the courier a ton of styrofoam “weighs” much more than a ton of coal.
The idea of shipping of a ton of coal and a ton of styrofoam with courier parcels is – for economic and logistical reasons – a complete absurdity. However, treated as a kind of “experiment”, it can be very informative. Before we carry it out, let’s see what packages are the cheapest.
Sortable, that is optimal
The key concept in optimising shipping costs is the “sortable package”. Each courier company has its own standards resulting from the capabilities and parameters of its lines for automatic parcel sorting. They influence the maximum dimensions and weight of the packages.
A common feature of all sortable packages is their shape: it must be a rectangular box. Its dimensions are determined by specifying the maximum dimension of the longest side, the maximum value of the sum of three dimensions (length + width + height) or a detailed specification of the largest sortable package dimensions.
Although the dimensions and weight of sortable packages among various couriers are similar, it is worth reading the courier’s guidelines thoroughly – a standard size insignificantly exceeded or the actual weight of the parcel not complying with the one declared may result in the service price being doubled or even tripled.
All packages exceeding the standard dimensions or weight, or labelled as “careful/glass” or “top/bottom”, become non-sortable items for machines. They are directed to be sorted manually, which results in higher shipping costs.
One ton is not always one ton
Time for the “experiment” mentioned at the beginning. We’ll assume the following baseline data for its purpose:
- maximum actual weight of the sortable package: 30 kg,
- volume of 1,000 kg of coal: 1.37 m3 (according to the calculator at https://iletowazy.pl/kalkulator-wagi-wegla/).
If we want to ship 1,000 kg of coal, we would have to send 33.3 packages, each of a volume of 0.04 m3, that means sized approximately 34.5 x 34.5 x 34.5 cm. For easier and more realistic calculation, we will send 34 cubic packages sized 35 x 35 x 35 cm – missing 20 kg of coal will balance the weight of packaging/containers.
A cost estimation (transport in Poland, from Kraków to Gdynia) using the calculators of several courier companies gave slightly different results – none of the resulting calculations exceeded PLN 2,000 gross.
Now styrofoam. We send packages of lightweight facing styrofoam sized 100 x 50 x 60 cm (0.3 m3) and weighing about 3 kg each.
It is easy to calculate that to ship one ton, we have to ship 333.3 packages – to simplify, we’ll assume 334. The price of such a service calculated in courier calculators comes out to at least ten times the value of sending parcels with coal.
How do they count it, or dimensional weight
Courier companies, while assessing shipment value, do not apply solely the criterion either of the actual weight of the package or its dimensions. In order to make the transport of parcels which are very big and very light (e.g. styrofoam) or very small and very heavy (e.g. coal) economically viable, they use a dimensional weight. It is an established for any given company’s conversion formula which calculates the volume of the package in weight units.
The formula for the dimensional weight is not complicated: we multiply the dimensions of the package to obtain its volume and divide it by 5,000 (depending on the company, it can also be 4,000 or 6,000). The calculation for our experimental ton of styrofoam and coal looks like this:
- styrofoam: 100 x 50 x 60 cm / 5,000 x 334 = 60 kg x 334 = 20,040 kg of the dimensional weight;
- coal: 35 x 35 x 35 cm / 5,000 x 34 = 8.575 kg x 34 = 291.55 kg of the dimensional weight.
The basis of the price valuation – actual or dimensional weight – of course depends on which value is greater. As a result, the transport of styrofoam is disproportionately expensive compared to transporting coal of the same actual weight.
How to cut down the cost of courier shipments?
The answer follows on from what has already been stated above. Here are the most important recommendations:
- use sortable parcels – if possible, avoid using non-standard parcels of size and weight exceeding those of the sortable parcel;
- do not waste space in the carton/on the pallet – the entire space of the package/pallet (both sortable and non-standard) should be filled up as much as possible;
- compare offers and track their changes – small differences in the weight of the sortable parcel in different courier companies can significantly affect the increase or reduction of its shipment cost – this is especially important when you cannot negotiate individual prices;
- automate the packaging management process – use packaging planning algorithms that will instantly match parcels to goods or goods to parcels so that the number and sizes of parcels are as small as possible – “manual” calculation is time-consuming and carries a high risk of error for which couriers charge you extra.
Of course you may choose many other ways to optimise your shipping costs, for example you may pass some costs on to your customers or reduce the range of goods you offer. However, it may turn out that you will not have to use them if you adjust the parcel parameters properly and automate the process of arranging the goods in the parcel.
In the text “Tetris for professionals, or the benefits of packing with an algorithm” , you will find more fully explained advantages of using packaging planning algorithms.