In the boldest move in parcel shipping rates since 1995, both FedEx and UPS will be implementing new pricing schemes for parcel shipments beginning in 2015. Precisely how much this affects shipping rates depends on the weight and size of each parcel, but increases could be as high as 30% for some shippers based on early estimates. This educational webinar explores ways to mitigate your risks in 2015 and beyond and how to get plans into place now avoid costly mistakes later. The transport packaging experts at Chainalytics will cover; - How to mitigate your risks in 2015 - Ways to right-size your packaging - Tactics for reducing small parcel costs - Shipping alternatives to consider now to avoid costly mistakes later For more information on how you can optimize your packaging, call tel: +1 (612) 260-7845 to speak with an expert, or simply email packaging@chainalytics.com.

1. 1 CHAINalyticspowered by
PARCEL
SHIPMENTS
Powered by
CHANGES TO
spotlight on
DIM WEIGHT

2. 2 CHAINalyticspowered by
Today’s Presenters
Tom Blanck
Principal, Packaging Optimization Practice
Tom manages the delivery of supply chain packaging optimization and complex
package engineering services as well as packaging value improvement
programs. Working with leading organizations, Tom has enabled packaging
improvement across multiple industries, including CPG, Manufacturing, Medical, and
Technology.
Darren Jorgenson
Practice Leader, Packaging Optimization Practice
Darren manages the delivery of supply chain packaging optimization, and complex
packaging engineering services that enable clients to achieve breakthroughs in reduced
logistics and freight costs to improve sustainability by better leveraging packaging design.
Darren’s strong expertise in supply chain management, network modeling, and statistical
analysis empowers fact-based transformations to create a competitive advantage for
client’s supply chains, end-to-end.

3. 3 CHAINalyticspowered by
What is Dimensional Pricing & What Does it Mean for You?
5 Ways to Mitigate Risk
Who is Chainalytics?
Agenda
1
3
2

4. 4 CHAINalyticspowered by
What is Dimensional Pricing & What Does it Mean for You?
5 Ways to Mitigate Risk
Who is Chainalytics?
Agenda
1
3
2

5. Who is Chainalytics?
11YEARS
GREAT SUPPLY
CHAIN PARTNER
SupplyChainBrain
8PROS TO KNOW
Supply &
Demand Chain
Executive
2013
COOLVENDOR
in supply chain services
Gartner
18TOP 25
supply chains
of Gartner’s
80of the
FORTUNE 500
ATLANTA
BANGALORE
MILAN
MINNEAPOLIS
HELSINKI
SINGAPORE
STOCKHOLM
SYDNEY 8offices
GLOBAL5 RETAILTOP 10
7 FOOD & BEVERAGETOP 10
6 CPGTOP 10
5 PAPER & PACKAGINGTOP 10
TOP SUPPLY CHAIN SCHOOL
67%
WITH DEGREE FROM
consultants
of
SPOKEN
13languages*

6. Intelligence
Networks
Decision
Support
Technology
Descriptive &
Diagnostic Analytics
Predictive &
Prescriptive Analytics
Strategic
Alignment
Performance
Improvement
Transformation
Fact-Based
Transformation

7. 7 CHAINalyticspowered by
Integrated
Demand & Supply
Planning
Supply Chain
Design
Supply Chain
Operations Transportation
Sourcing
& Supplier
Management
Packaging
Optimization
Service
Supply Chain
Supply Chain
Intelligence
& Technology
Our
Competencies

8. 8 CHAINalyticspowered by
Services We Provide
Supply Chain
Packaging
Optimization
Packaging System
Assessments
Logistics Improvements
Freight Cost Reduction
Warehouse Utilization
Handling and Labor
Packaging
Improvement
Programs
Value Engineering
Benchmarking
Guidelines, Global
Packaging Standards
New Transportation
Modes or Sales Channels
Complex
Package
Engineering
Complex Packaging
Solutions & Design
High Value Products
Products with Sensitive or
Demanding Protection
Requirements
Damage Reduction
Distribution Hazard
Analysis

9. 9 CHAINalyticspowered by
The Impact of Packaging
 Cost reduction
 Damage
Reduction
PROCUREMENT
 Total cost of
ownership
 Packaging
specifications
 Specifications
ownership
 Bid ability
 End-to-end
cost review
SALES &
MARKETING
 Speed to
market
 Brand identity
 Compliance
 Casepack
quantity
 Number of
facings
 Image
preservation
 Brand integrity
 Primary
package
development
OPERATIONS
 Dimensional
pricing
 Warehouse
capacity
 Packaging
Line
 Just-in-time
fulfillment
 Transportation
utilization
E-COMMERCE
 Cost reduction
 Dimensional
pricing
CUSTOMER
SERVICE & QUALITY
 Damage
reduction
 Customer
satisfaction
 Finished goods
 Dissatisfied
customers
 Field repair
 Non-saleables
 Obsolescence
 Damage
STRATEGICFOCUSCOREISSUES

10. 10 CHAINalyticspowered by
What is Dimensional Pricing & What Does it Mean for You?
5 Ways to Mitigate Risk
Who is Chainalytics?
Agenda
1
3
2

11. Burning Platform: Dimensional Pricing
Beginning December
29, 2014, dimensional
weight will be utilized to
calculate the billable
weight of a shipment on
all UPS Ground services
and UPS Standard to
Canada packages.”
The result could result in an estimated 30-40%
increase in freight costs for applicable items.
“ “
UPS Announces Dimensional Weight Changes 17 June 2014
FedEx Ground will
apply dimensional
weight pricing to all
shipments, effective
January 1, 2015.”
FedEx Announces Pricing Changes 2 May 2014

12. 12 CHAINalyticspowered by
What will this change mean to my shipping costs?

13. 13 CHAINalyticspowered by
Calculating Dimensional (DIM) Weight
Length x Width x Height
166
(Standard Dim Weight Multiplier)
To figure out the shipping cost compare the actual weight vs. the
dimensional weight of your package.
The greater of the 2 numbers is what UPS/FedEx will use for billing.

14. 14 CHAINalyticspowered by
Calculating Dimensional (DIM) Weight
This will impact both forward and reverse flows.
Billing rate net result:
Actual package weight: 8 lbs.
21.5”L x 7.5”W x 17”H
166
2,741 c.i.
166
16.5 lbs.
17 lbs.

15. 15 CHAINalyticspowered by
Example: Light Weight Item
Currently, an item measuring:
13” x 9” x 3” weighing 8 lbs.
is shipped in a
21.5” x 7.5” x 17” box and
billed at 8 lbs.
In the near future,
based on dimensional
weight, this shipment
would be billed at 17 lbs.
You are paying to ship
the air, too.
Package weight: 8 lbs.
Dim weight: 17 lbs.
This product shipped ground from
Columbus, OH to Minneapolis, MN has gone from:
$17.62 to $19.94
Source: FedEx.com/ratefinder

16. 16 CHAINalyticspowered by
Spot Poll
What drives your
supply chain?
Quality: Right time, right place
Speed: Get it now
Costs: Bang for the buck
16 CHAINalyticspowered by

17. 17 CHAINalyticspowered by CHAINalyticspowered by
What is the risk?
222,461
159,025
Sum of
Billed Weight
Sum of
Package Dim
Weight
250,000
Profile of a typical day’s shipping
200,000
150,000
100,000
50,000
0
Direct seller of gourmet products
 Identify high risk
products, SKUs
 Assess current box
sizes
 Calculate trade-offs
Analyze
Dimension Weight

18. 18 CHAINalyticspowered by
What is Dimensional Pricing & What Does it Mean for You?
5 Ways to Mitigate Risk
Who is Chainalytics?
Agenda
1
3
2

19. Ways to approach
DIM Weight
changes

20. 1 Do Nothing

21. 21 CHAINalyticspowered by CHAINalyticspowered by
Do Nothing
 Shipping costs will
increase
 Can your company
absorb these costs
or do you pass them
onto your
customers?
What to consider if
you choose this
option:
222,461
159,025
Sum of
Billed Weight
Sum of
Package Dim
Weight
250,000
Profile of a typical day’s shipping
200,000
150,000
100,000
50,000
0
Direct seller of gourmet products
additional
63,436 lbs.
a day

22. 2 Negotiate a
Dimensional
Multiplier

23. 23 CHAINalyticspowered by CHAINalyticspowered by
Negotiate a Dimensional
Multiplier
21.5”L x 7.5”W x 17”H
166
= 17 lbs. Dim weight
Dim Weight Multipliers
BillableWeight
Negotiate
your own deal
21.5”L x 7.5”W x 17”H
322
= 9 lbs. Dim weight
0
2
4
6
8
10
12
14
16
18
166
171
176
181
186
191
196
201
206
211
216
221
226
231
236
241
246
251
256
261
266
271
276
281
286
291
296
301
306
311
316
322

24. 3 Review Supply
Chain Network

25. 25 CHAINalyticspowered by
Shipping
Zones
Miles
Greater than Less Than
2 0 150 $0.41
3 151 300 $0.42
4 301 600 $0.44
5 601 1,000 $0.46
6 1,001 1,400 $0.48
7 1,401 1,800 $0.52
8 1,801 $0.58
Review Supply Chain Network
The further from the customer, the larger the increase per pound
Average D per pound

26. 26 CHAINalyticspowered by
Review Supply Chain Network
Current
New
Location
Customers
CustomersCustomers

27. 4 Right-Size
Packaging

28. 28 CHAINalyticspowered by CHAINalyticspowered by
159,025
Sum of
Billed Weight
Sum of
Package Dim
Weight
250,000
Profile of a typical day’s shipping
200,000
150,000
100,000
50,000
0
Direct seller of gourmet products
Right-Size Packaging
 Add boxes
 Optimize box sizes
 Material costs; value
engineering
 Production line
impacts
What to consider
Options
 Optimize packaging
system
 On-demand
packaging
171,939
Re-define
your
standard
packaging;
lower your
dim weight

29. 29 CHAINalyticspowered by
Example: Light Weight Item
Source: FedEx.com/ratefinder
Package weight: 8 lbs.
Dim weight: 7.5 lbs.
Optimized Box:
The same item measuring:
13” x 9” x 3” weighing 8 lbs.
is shipped in an optimized box
16.5” x 10.4” x 7.2” and
billed at 8 lbs. dim weight
This product shipped ground from
Columbus,OH to Minneapolis, MN has gone from:
$17.62 to $17.62

30. 30 CHAINalyticspowered by
16.5”
Example: Light Weight Item
$17.62$19.94
8 lbs. actual --> 17 lbs. Dim 8 lbs. actual -->7.5 lbs. Dim
Source: FedEx.com/ratefinder
SAVINGS $232,000 in transportation spend for every
100,000 items shipped
21.5”
17”
10.4”
7.5”
7.2”

31. 5 Product
Design

32. 32 CHAINalyticspowered by CHAINalyticspowered by
Product Design
 Design product to
minimize packaging
 Understand and
mitigate distribution
network hazards
 Balance “shipability”
and package cost
What to considerDamage Costs vs. Package Costs
Measures taken to reduce product damage and improve customer
satisfaction will invariably increase package costs. The optimal
packaging system balances damage costs with the cost of the
package.
Optimal
Packaging
System

33. 33 CHAINalyticspowered by
Spot Poll Results
What drives your supply
chain?
A) Quality: Right time, right place
B) Speed: Get it now
C) Costs: Bang for the buck
33 CHAINalyticspowered by

34. 34 CHAINalyticspowered by CHAINalyticspowered by
Understand
& Balance Tradeoffs
 Know where you fit
 Design product to
minimize damage
What to consider
Speed
Quality
Costs

35. 35 CHAINalyticspowered by
In Summary
KNOW YOUR
Negotiate Dim Weight Multiplier
Explore Carrier Alternatives
Network strategy review
Right size packages
Optimize Packaging System
Design Product for Distribution
35 CHAINalyticspowered by
Risks. Priorities. Options.

36. 36 CHAINalyticspowered by
Thank you for attending
Spotlight: Dim Weight
Changes for Parcel
Shipments
Stay connected!
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www.linkedin.com/company/chainalytics
@chainalytics
thesupplychaingang
Join the Supply Chain
Intelligence Network
http://bit.ly/areyouIN
CHAINalyticspowered by
Questions?
Darren Jorgenson
Practice Leader
E: djorgenson@chainalytics.com
P: +1 (612) 252-1845
Tom Blanck
Principal
E: tblanck@chainalytics.com
P: +1 (612) 252-1831