Shipping costs have traditionally been calculated based on gross weight in pounds or kilograms. When freight carriers only charge by the weight of the packages they handle, low density and lightweight packages don't make them any money because of the amount of space they take up in the delivery trucks, planes, etc., in proportion to their true weight. Dimensional weight has been put into practice by the freight carriers worldwide to give them the ability to establish a minimum charge for the amount of space a package takes up, ensuring that they don't lose money on lightweight packages.

Dimensional weight has been used for air freight for some time, and around 5 years ago, big name, shipping carriers like FedEx and UPS started applying dimensional weight to their ground service shipments.

Calculating Dimensional Weight
Dimensional weight is determined by calculating the cubic size of the package by multiplying its length, width and height, using the longest point on both sides, also considering any misshapened sections rounding each dimension to the closest whole number.

Determining Billable Weight
In most cases, dimensional weight is utilized as a variable in figuring out the package’s final weight (the billable weight) which determines the shipping cost of the package. To determine the billable weight you need to compare your packages true weight to the dimensional weight and the higher of the two will be the billable weight and needs to be used to determine the rate. If you're shipping multiple packages, you'll need to combine the billable weight of all of the packages in your shipment.

Saving Money On Your Shipping costs
Shipping costs are one of the biggest expenses for entrepreneurs and small businesses, but you can save money on your shipping by decreasing the size of the box and always letting the carrier you're using know the precise dimensions of the package you're shipping.

Bottom line, carriers have had to find a better way to ensure they get paid for the amount of space these shipments take up, due in part to the increase in fuel charges. The carrier's in question also feel that because of the dimensional weight rating method, more businesses and entrepreneurs will start to pay more attention to their packaging practices. Their efforts will greatly reduce unnecessary excess packaging materials and package sizes, leading to reductions in transportation costs, fuel use and vehicle emissions.