Knowledge is power, especially when you’re an ecommerce entrepreneur looking to minimize costs. One way to keep your spending in check is to know which mode of shipping offers the most economical fees for your business — without putting your products at risk for delays and wastage.
Less-than-truckload shipping comes to mind because you only pay for the space your goods take up in a truck. You pay for lower transportations costs than if you were to book an entire truck and your products get to their destination in time.
Many factors determine shipping costs, such as fuel, distance traveled, weight and volume — which is measured in cubic meters or CBM.
Let’s explore what CBM means in shipping, how you can use it to calculate shipping costs, and how Ninja Restock gives you affordable and faster ways to deliver your stocks to your stores.
Also read: How Less-Than-Truckload Shipping Benefits Your Business
What is CBM in shipping?
CBM in shipping is the basis for how much space the shipment will take up in a plane, ship or truck.
It’s a globally used measurement unit for shipment volume, determining its price and other charges. CBM also helps logistics providers plan how to fit multiple packages in a fixed space.
How to calculate CBM
All you have to do is multiply the length (l), width (w) and height (h) of an object together: (l x w x h = CBM).
That’s the basic calculation and formula for the CBM of square and rectangular shipments. Depending on the shape of the parcel, its formula still varies.
For instance, the formula to get the CBM of cylindrical packages is π x r ² x h; where π is pi (numerical value = 3.14), r is radius and h is height.
As for irregularly shaped objects, simply measure their longest length, longest width and longest height and multiply the three figures.
How CBM affects shipping costs
Shipping costs are an accumulation of many charges, most of which are based on a package’s CBM. These costs include labor and fuel costs, fuel adjustment costs terminal handling charges, inland haulage charges and currency adjustments, which are included in your logistics provider’s shipping rate.
So it doesn’t just stop at determining your package’s CBM, you also have to factor in its gross weight and shipping rate.
This is where dimensional weight (DIM) comes in, where CBM is converted to its equivalent weight (cbm : kg) based on a DIM factor. And the generally-accepted DIM factors of each shipping method vary:
DIM factor:
- By air: 1 CBM : 167 kg
- By road: 1 CBM : 333 kg
- By sea: 1 CBM : 1,000 kg
Once you have your dimensional weight and gross weight, the logistics provider will take the highest figure between the two and multiply it by its shipping rate. Here are some sample computations for each shipping method:
1. For sea shipping
EXAMPLE 1
Where: DIM factor for sea cargo: 1 m³ or cbm:1,000 kg or 1 ton
- CBM of package: 640,000 m³
- Gross weight: 200 kg (0.2 ton)
- Freight rate: ₱2,500 per CBM/ton
- Dimensional weight (CBM / 1,000kg): 640,000 m³ / 1,000kg = 640 kg (0.64 ton)
Following the DIM factor for sea cargo, the package’s dimensional weight is 640 kg or 0.64 ton. Since the dimensional weight is bigger than the gross weight of 0.2 ton, the shipping costs are calculated as: ₱2,500 x 0.64 ton = ₱1,600.
EXAMPLE 2
Where: DIM factor for sea cargo: 1 m³ or cbm:1,000 kg or 1 ton
- CBM of package: = 4,000 m³
- Gross weight: 5,500 kg (5.5 ton)
- Freight rate: ₱2,500 per CBM/ton
- Dimensional weight (CBM / 1,000kg): 4,000 m³ / 1,000kg = 4 kg (4 tons)
Following the DIM factor for sea cargo, the package’s dimensional weight is 4,000 kg or 4 tons. Since the gross weight of 5.5 tons is bigger than the dimensional weight, the shipping costs are calculated as: ₱2,500 x 5.5 tons = ₱13,750.
2. Air cargo
EXAMPLE 1
Where: DIM factor for air cargo: 1 m³ or cbm:167 kg or 0.167 ton
- CBM: 150,00 m³
- Freight rate: ₱7,500 per CBM/ton
- Gross weight: 200 kg (0.2 ton)
- Dimensional weight: 150,000 m³ / 167 = 898.20 kg (0.898 ton)
Following the DIM factor for air cargo, the package’s dimensional weight is 898.20 kg or 0.898 ton. Since the dimensional weight is bigger than the gross weight of 0.2 ton, the shipping costs are calculated as: ₱7,500 x 0.898 ton = ₱6,735.
EXAMPLE 2
Where: DIM factor for air cargo: 1 m³ or cbm:167 kg or 0.167 ton
- CBM: 168,000 m³
- Freight rate: ₱7,500 per CBM/ton
- Gross weight: 1,200 kg (1.2 ton)
- Dimensional weight: 168,000 m³ / 167 = 1,006 kg (1.006 tons)
Following the DIM factor for air cargo, the package’s dimensional weight is 1,006 kg or 1.006 tons. Since the gross weight of 1.2 tons is bigger than the dimensional weight, the shipping costs are calculated as: ₱7,500 x 1.2 tons = ₱9,000.
3. For less-than-truckload (LTL) cargo
EXAMPLE
Where: DIM factor for land cargo: 1 m³ or cbm:333 kg or 0.333 ton
- CBM: 72,000 m³
- Freight rate: ₱3,000 per CBM/ton
- Gross weight: 200 kg (0.2 ton)
- Dimensional weight: 72,000 m³ / 333 = 216.22 kg (0.216 ton)
Following the DIM factor for land cargo, the package’s dimensional weight is 216.22 kg or 0.216 ton. Since the dimensional weight is bigger than the gross weight of 0.2 ton, the shipping costs are calculated as: ₱3,000 x 0.216 ton = ₱648.
Be mindful of the measurement units of both the volume and the weight. If the information on the parcel is in feet, centimeters, pounds, etc.; simply convert these figures before calculating your CBM and shipping costs.
Shipping costs are not the only consideration when you’re on a budget. The right logistics partner for your needs, from a 2PL logistics solution to an end-to-end solution, also plays a part.
Ninja Restock offers per CBM shipment for stocks and inventory
Need to move your stocks and inventory fast without waiting for your delivery truck volume to get full? We can speed up and make your distribution logistics more affordable through Ninja Restock.
Our logistics solution is optimized for small and corporate businesses that need less-than-truckload shipping or full truckload shipping.
Keep your stores well stocked and supply chain efficient with Ninja Restock. Talk to us today about how you can save more with our cost-effective solution.
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