Every year, LTL pallet freight depots globally lose millions of dollars in revenue by not implementing certified, legal for trade pallet freight dimensioning systems. Those at most risk however are the service providers who transport irregular shaped freight items– or uglies as they are called. That’s right: millions of $$ per depot, annually. Read on, I’ll show you how.
If you are the manager of an LTL freight depot you already know how understand this vexing issue – and it you know how important it is. While your staff might be skilled with a tape measure or measuring stick, these methods are often not legal for trade and are especially inaccurate for irregular or odd-shaped items. If you rely on forklift scales for weight measurements, there’s a high chance those readings are incorrect and not legal for trade either.
In both scenarios, if you do not already use a legal for trade pallet dimensioner, you’re likely losing revenue. Furthermore, you wouldn’t be able to justify any price increases to customers if legally challenged. This is where the term “legal for trade” comes into play, overseen by the Australian National Measurement Institute (NMI), which certifies the equipment and licenses tradespersons to verify it in the field.
The Financial Model: How Each Depot Can Lose a Million Dollars Annually
Typically, charges invoiced to the shipper are based on a formula where 1m³ equals a certain number of kilos (e.g., 250 or 333) at a price per kilo rate (e.g., $0.90), heavily influenced by the final delivery destination or zone. Today, more freight is being charged by cubic volume rather than by weight.
Scenario 1
Imagine you charge for non-contract LTL palletised freight at 1m³ = 250kgs. For instance, freight going from Melbourne (MEL) GPO to Brisbane (BNE) GPO via road express, with these dimensions:
- Declared Dimensions: 100 x 100 x 100 cm (LWH) = 1.00m³
- Dimensional Weight: 1.00m³ x 250 kgs = 250 kgs
- Price: $250 (at $1 per kg)
But what if the actual measurements are:
- Actual Dimensions: 105 x 110 x 120 cm (LWH) = 1.386m³
- Dimensional Weight: 1.386m³ x 250 kgs = 346 kgs
- Price: $346
This represents a difference of $96 dollars! For just one pallet!
Scenario 2
Consider a palletised item where the sender did not measure accurately, ignoring overhang or precise height measurement. Declared dimensions are 120 x 120 x 120 cm (LWH), for example a very normal pallet size, with both the dim weight and dead weight being 432 kgs:
- Declared Dimensions: 120 x 120 x 120 cm (LWH) = 1.728m³
- Dimensional Weight: 1.728m³ x 250 kgs = 432 kgs
- Price: $432
However, the actual dimensions per the Pallet Freight Dimensioning System are 130 x 135 x 140 cm (LWH), with a dead weight still at 432 kgs:
- Actual Dimensions: 130 x 135 x 140 cm (LWH) = 2.457³
- Dimensional Weight: 2.194m³ x 250 kgs = 548 kgs
- Price: $614
This difference of $182 for a single seemingly normal pallet shows how easily items can be under-measured, leading to significant revenue losses.
The Broader Impact
On average, if you gain an extra $15 per measured pallet across 300 items per day, this equates to $20,000 in additional revenue per week. Over 50 weeks, this totals over $1.1 million dollars.
Some inter-state express freight carriers gain an average of $10 to $15 per measured pallet or bulk item, handling around 500 unique pieces per day:
- Daily Revenue Gain: 500 x $15 = $7,500
- Annual Revenue Gain: $7,500/day x 250 days = $1,875,000
Smaller inter-state depots handling around 200 larger or palletised items per day also average $15-$20 per pallet:
- Daily Revenue Gain: 150 items x $15 = $2,250
- Annual Revenue Gain: $2,250/day x 250 days = $562,500
Summary
In summary, the amount of revenue leakage can be staggering. By adopting certified, legal-for-trade pallet dimensioning systems, you can ensure precise measurements, capture time-stamped images, defend your pricing legally, and recover significant lost revenue. But you are also improving customer service and, in many cases, improving your own digital strategy by automating and digitising previously manual processes.
About the Author
Rhett Talley is the NWI Group National Product Manager for Dimensioning and QLD Heavy Vehicle Weighing Sales. Rhett has a keen interest in data and digital transformation in the supply chain.
Contact Rhett
rhett.talley@nwigroup.com.au
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In today’s just-in-time supply chain environment, relying on manual measurement of weights and dimensions can hinder warehouse efficiency. This can be particularly troublesome if you are a manager at a distribution centre that ships out, say, 50 or more customer orders packed on pallets per day. The absence of an automated pallet dimensioning system can result in inefficiencies and inaccuracies, leading to dimensional errors, reduced productivity, and increased costs. In this blog post I want to explore eight key benefits of using a pallet dimensioner to enhance warehouse efficiency and productivity.
What Is a Pallet Dimensioner?
A pallet dimensioner is a sophisticated technology, often legal for trade certified, that is used in warehouses and DCs to automate the measurement of pallet freight or palletised SKU dimensions (length, width, and height), weight, and image capture. It utilises 3D sensor technology and high-definition cameras designed to measure both cubic and irregular-shaped freight and/or large SKUs quickly and accurately.
Traditional manual measurement processes involve using tape measures, calculating weight on platform sale or forklift scale, taking photographs, and uploading this separately collected data into a freight management system, WMS or ERP. This process is time-consuming and prone to human error. In contrast, a pallet dimensioner automates these tasks, capturing dimensions, weight, and images within seconds, and then digitally export this captured data in real time making it a crucial investment for any warehouse.
If you are an LTL (less than truckload) freight services provider, then you may already be using these devices for revenue recovery.
However, as we will see, there are tremendous benefits too for operators of warehouses and DCs.
Benefits of a Pallet Dimensioner to Increase Warehouse Efficiency
1. Improved Productivity
Warehouse staff typically spend considerable time manually measuring pallet dimensions and weight and often also capturing images. Irregular-shaped pallets can be particularly challenging and time-consuming. This manual process is labour-intensive and can reduce employee productivity. Depending on the size and shape of the pallet one person may not be able to measure it correctly.
An automated pallet dimensioner can quickly capture cubic dimensions, weight, and images, of any shaped item significantly reducing the time spent on these tasks. This efficiency boost is especially beneficial for warehouses processing 50 or more pallets daily, leading to improved overall productivity.
2. Increased Accuracy
Dimensional and weight accuracy of goods stored and shipped is critical in warehouse operations and errors can be costly. An automated pallet dimensioner reduces the inaccuracies that come from bad measurements and errors in manual data entry. Using laser-based or 3D infrared dimensioning technology and high-quality cameras automated pallet dimensioners can ensure precise measurements for every pallet.
3. Australian NMI Legal for Trade Certified Measurements
If you are a warehouse or DC and you are charged by your freight service provider and/or on-charge a customer in turn based on a dimensional weight formula, using a legal-for-trade dimensioner is crucial. An NMI-certified pallet dimensioner ensures that your declared dimensions and weight can be defended in court if it comes to that. And the images captured help validate your claims, ensure good customer service – and importantly can eliminate back charges from the freight service provider.
For irregular shaped items the cubic dimensions are defined as, “the smallest cuboidal shape the irregular item would fit into.” Considering this definition it is easy to see how an operator can get this wrong when trying to determine this by hand. This is why so many amended declarations take place at the fright depot – they are often using a legal for trade pallet dimensioner themselves. In fact they must use such a device if they are to change your declarations – so keep that in mind.
4. Effective Claim Management
Pallet dimensioners automatically capture images when a pallet is received and shipped. These images provide concrete evidence to refute customer or carrier claims, demonstrating that a pallet was received and shipped in perfect condition. If items are lost or damaged this capability can significantly reduce disputes and potential losses.
5. Freight Service Provider Cut Off and Your Digital Strategy
A pallet dimensioner forms part of a distribution centre’s digital strategy. By automating and digitising the capture of accurate outbound pallet freight data you can create a digital manifest that is comprised of accurate dimensional and weight declarations. It is clear how many individual pallets there are and what their respective sizes and weights are. This data can be made available for all stakeholders to process instantly. It is thereby possible to ensure that the 2pm or 3pm cutoff to register your pickup is met. This also puts the responsibility on the freight service provider to send the right size truck or vehicle to the pickup based on your accurate declarations.
6. Revenue Optimisation
If you are DC or 3PL who charges customers based on your declaration of weight and dimensions you want to get this right. If you under declare then the freight service provider will charge you a greater amount than you have charged your own customer, and it may be too late to amend your invoice. Manual measurements often result in inaccurate or incomplete data, making it challenging to charge customers appropriately. Inaccurate measurements often lead to undercharging – or overcharging, causing customer dissatisfaction and time-intensive and dispute-causing chargebacks.
7. Inbound: Got Large or Palletised SKUs?
Quite often large SKUs, for example on custom skids, are packed the same coming into the DC as they are going out. Thus, getting accurate inbound XL SKU data into the WMS can mean that this data is there to be used in outbound or shipping. Accurate and timely data from pallet dimensioners improve inventory management by ensuring that all inventory measurements are precise. This accuracy aids in better space utilization and planning, reducing storage costs and enhancing overall operational efficiency.
8. Streamlined Operations and Reduced Labour
By automating the dimensioning process, manual tasks are reduced, and labour is better utilised. Pallet dimensioners streamline warehouse operations. The quick and precise data capture reduces bottlenecks and improves workflow, enabling warehouses to handle larger volumes more efficiently and with fewer errors.
In Summary
Investing in a pallet dimensioner offers numerous benefits that significantly enhance warehouse or distribution centre efficiency. From improving productivity and accuracy to reducing back charges and customer disputes, pallet dimensioners are an important asset for modern warehouses aiming to stay competitive in the logistics industry.
About the Author
Rhett Talley is the NWI Group National Product Manager for Dimensioning and QLD Heavy Vehicle Weighing Sales. Rhett has a keen interest in data and digital transformation in the supply chain.
Contact Rhett
rhett.talley@nwigroup.com.au
1300 669 162
0403 805 540
