How do you manage shipping costs while ensuring your products reach customers swiftly and efficiently?
In the Philippines, logistics and shipping costs remain a significant challenge. In 2024, shipping line freight rates alone account for 22-25% of total logistics expenses, with customs clearance making up roughly 50% of these costs. As the demand for faster shipping increases, businesses must carefully calculate CBM (Cubic Meter) to optimize space and manage costs effectively.
CBM plays a pivotal role in determining the shipping cost based on volume, especially in a country like the Philippines, where the logistics infrastructure relies heavily on maritime transport. By understanding CBM’s meaning, businesses can better estimate costs, maximize cargo space, and streamline their shipping processes, whether you’re sending goods locally or internationally.
In this blog, we’ll break down the importance of CBM, how it impacts shipping costs, and why understanding it is essential for businesses in logistics and e-commerce.
What Is CBM in Shipping?
CBM refers to the volume of space a shipment occupies, calculated in cubic meters. It’s a critical metric to determine how much space a shipment will take up in a transport vehicle or container.
When calculating shipping costs, freight companies don’t just look at the weight of the cargo; they also consider the volume. This becomes especially important when shipping lightweight items that take up significant space, like large packages of feathers. Without calculating CBM, it would be difficult to determine whether a shipment’s volume or weight will incur higher shipping fees.
Now that we’ve established the importance of CBM, let’s look at how CBM directly impacts shipping costs and how it’s used to determine the chargeable weight for shipments.
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How Does CBM Affect Shipping Costs?
Shipping companies calculate the cost of freight based on both weight and volume. The greater the CBM, the more space your shipment occupies, which directly impacts the transport cost, especially for ocean and air freight. To help you better understand how CBM impacts your shipping costs, here are the key factors to consider:
- Chargeable Weight: For shipments with large dimensions but low weight (like a box of feathers), CBM helps determine what’s called the chargeable weight. This is the weight used by the carrier to assess the shipping cost. The carrier will compare the actual weight with the dimensional (volumetric) weight, and the higher of the two will determine the chargeable weight.
- Dimensional Weight (DIM Weight): DIM weight is calculated by multiplying the CBM by a DIM factor. This factor varies depending on the type of transport—air, sea, or land. For instance, air freight uses a DIM factor of 1:6000, meaning the volume of a shipment is divided by 6000 to calculate the dimensional weight in kilograms.
- Efficiency and Container Space: By knowing the CBM of your goods, you can choose the right container size to optimize space and reduce shipping costs. For example, if your cargo is light but takes up a lot of space, selecting a more suitable container will help reduce unnecessary costs.
Knowing how your goods fit into various container sizes helps you optimise space and reduce shipping costs. To ensure you’re not overpaying for space, the next step is understanding how to size your packages correctly. Here’s why getting this right matters.
Why Is It Important to Correctly Size Your Package?
Correctly sizing your package helps you avoid paying for unused space. Shipping companies often charge based on both weight and volume. When your package is too big for the contents inside, you could be overcharged for the extra space it occupies. Whether you’re shipping light, bulky items or small, dense packages, understanding how to size your packages correctly ensures you’re getting the most cost-efficient shipping options.
Now, let’s look closer at choosing the correct container for your shipment to maximize your space.
CBM Fit for Containers
Understanding the volume of your shipment is crucial when estimating how many products will fit into various container sizes, such as the 20′ or 40′ shipping containers.However, it’s not as simple as comparing the total shipment volume to the maximum capacity of the container.
In practice, there’s always some unused space due to the shape and size of the items, their packaging, and how they’re stowed inside the container. Generally, the usable capacity of a container is around 80% of its total volume. To help you get a better idea of how many products will fit in the most common container sizes, take a look at the table below:
| Container Type | Length | Width | Height | Capacity | Maximum Capacity |
| 20′ Container | 589 cm | 234 cm | 238 cm | 25-28 CBM | 33 CBM |
| 40′ Container | 1200 cm | 234 cm | 238 cm | 54-58 CBM | 66 CBM |
| 40′ High Cube | 1200 cm | 234 cm | 269 cm | 60-68 CBM | 72 CBM |
| 45′ High Cube | 1251 cm | 245 cm | 269 cm | 72-78 CBM | 86 CBM |
Keep in mind that the exact fit of your goods will vary depending on the nature and packaging of the products, but this table provides a general estimate to help plan your shipments effectively.
CBM Conversion to KG
The conversion of CBM to kilograms depends on the shipping method:
- By Sea: 1 CBM = 1000 Kg
- By Air: 1 CBM = 167 Kg
- By Road: 1 CBM = 333 Kg
These conversions help determine the chargeable weight for your shipment and can significantly affect the cost, especially when shipping lightweight goods that take up more space.
With these container capacities and weight conversions in mind, accurate CBM calculations are key. Let’s break down the step-by-step process to measure your shipments correctly starting with standard package shapes.
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How to Calculate CBM for Shipping?
Calculating CBM (Cubic Meter) is essential for understanding shipping costs and optimising container space. CBM determines how much room your goods will take up in a shipping container, which directly affects the cost of transport. By calculating CBM, businesses can avoid overpaying for unused space and ensure a better fit for their shipments.
Here’s a breakdown of how to calculate CBM for different shipment types based on their shape and size:
1. For Rectangular or Square Packages
For standard, box-like packages, the formula for CBM is straightforward:
CBM = Length × Width × Height
Example: If a package is 3 meters long, 2 meters wide, and 4.5 meters high, the calculation is:
CBM = 3 × 2 × 4.5 = 27 CBM
2. For Irregular-Shaped Packages
When your package is irregular, use the longest dimensions for the length, width, and height to calculate the CBM.
CBM = Longest Length × Longest Width × Longest Height
3. For Cylindrical Packages
For cylindrical packages (e.g., pipes, rolls), the formula changes. You need to calculate the radius (half the diameter) and use the following formula:
CBM = π × r² × h
Where r is the radius, h is the height, and π is approximately 3.14.
Now that we know how to calculate CBM for different package types, it’s important to understand how to calculate the chargeable weight based on CBM.
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Understanding CBM Chargeable Weight
Chargeable weight is a key factor in determining your shipping costs, as freight companies typically use it to decide the price of transport. Unlike just considering the actual weight of the cargo, the chargeable weight also takes into account the size of the package, especially when dealing with lightweight, bulky items.
By understanding how chargeable weight is calculated, businesses can avoid unexpected costs and choose the most cost-effective shipping methods.
Here’s how both the actual weight and the dimensional weight play a role in the calculation:
- Actual weight: The gross weight of the package.
- Dimensional weight: Calculated by multiplying the CBM by the appropriate DIM factor for your shipping method.
If your package’s CBM results in a higher dimensional weight than the actual weight, the carrier will charge based on the CBM weight.
Now that we understand CBM chargeable weight, let’s take a closer look at how CBM affects shipping costs in different modes of transport.
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How to Calculate Shipping Costs Based on CBM?
When determining shipping costs, the chargeable weight, whether it’s the actual weight or the CBM, is the deciding factor. This is crucial because it can significantly affect your overall shipping expenses, especially for bulky, lightweight items or irregular-shaped packages.
Understanding how CBM impacts the calculation of shipping costs allows you to choose the most cost-effective shipping options, avoid overpaying for space, and make better decisions about how your goods are transported. Here’s how CBM influences shipping costs across different types of transport:
1. Air Freight
For air shipping, CBM is critical because airlines charge based on both volume and weight. If a shipment is light but occupies a lot of space, the CBM will often be used to determine the chargeable weight, which impacts the total freight cost.
Example: Suppose you’re a Philippine-based e-commerce merchant who sells large decorative items like home furniture. You have a shipment with dimensions 2m x 2m x 2m (8 CBM) weighing only 500 kg. Since the volume weight (1333.33 kg) is higher than the actual weight, air freight costs will be calculated based on the volume weight, which will significantly affect your shipping cost.
2. Sea Freight
For ocean freight, CBM plays a more prominent role than weight. Ocean freight carriers typically charge based on volume. If the CBM exceeds the weight, the carrier will charge based on the volume of the goods rather than their actual weight.
Example: Imagine you’re an importer who brings in large machinery parts from China. Your shipment dimensions are 5m x 5m x 5m (125 CBM), but it only weighs 500 kg. In this case, the shipping cost will be based on 125 CBM, as the volume exceeds the weight, leading to higher costs for the larger space your cargo takes up.
While chargeable weight is a key factor, understanding how dimensional weight comes into play is just as crucial. Let’s break down how this measurement affects your shipping costs.
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Dimensional Weight: What It Is and Why It Affects Shipping Costs
Dimensional weight is a pricing technique used by shipping carriers to calculate the cost of a package based on its size rather than just its actual weight. Carriers, especially for air freight, calculate dimensional weight to ensure they’re charging for the space a package occupies in their containers. If your package is large but light, its dimensional weight could be higher than its actual weight, leading to increased shipping costs.
How Dimensional Weight Is Calculated:
- Air Freight: For air freight, dimensional weight is calculated by multiplying the CBM (Cubic Meter) by a DIM factor (e.g., 1:6000).
- Example: A package with 0.2 CBM (volume) may be calculated as 0.2 CBM x 1:6000 = 33.33 kg. This would be the dimensional weight.
Dimensional weight is an important factor to consider, especially when shipping bulky but light items. Knowing how to calculate it and how it impacts your shipping costs can help you avoid unexpected expenses. Now let’s discuss how understanding CBM can help optimize shipping costs and improve logistics efficiency.
Tips for Optimizing Shipping Costs with CBM
Shipping costs can quickly add up if you’re not careful with how your space is used. Fortunately, CBM can be your ally in cutting costs. By adjusting packaging sizes, choosing the right carriers, and being mindful of weight distribution, you can ensure you’re not paying for unused space.
These practical strategies will help you get the most out of your shipping budget and keep your operations running smoothly. Here’s how you can optimise CBM to keep costs low:
- Choose the Right Packaging: Optimize the packaging to minimize wasted space and reduce CBM. Use smaller boxes or containers that fit your products well.
- Consolidate Shipments: Group smaller packages into larger shipments to reduce the overall CBM, especially for international freight.
- Use Online Tools: Many shipping carriers offer CBM calculators online, helping you estimate the cost and find the best packaging solution for your shipment.
With these tips in mind, businesses can optimize their shipping operations and avoid unnecessary costs.
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How Inspire Solutions Asia Can Help Optimize Your Shipping and CBM Calculations?
At Inspire Solutions Asia, we understand that the complexity of logistics can sometimes overwhelm businesses, especially when managing shipping costs and optimizing space. As e-commerce continues to grow, managing your shipping logistics efficiently becomes even more crucial, and the role of Cubic Meter (CBM) calculation plays a significant part in this.
Here’s how we can help you handle the complexities of CBM and shipping logistics:
1. End-to-End Logistics Management
Our Fusion platform and integrated logistics solutions help you calculate the most cost-effective way to ship goods, ensuring that your shipments are optimized for CBM. From warehousing to last-mile delivery, we offer a easy logistics experience that simplifies shipping processes.
2. Warehouse Optimization
We provide ambient and temperature-controlled storage solutions with real-time inventory tracking so that you can monitor and adjust stock levels based on CBM calculations. Whether you’re shipping small or bulky items, we can help you optimize storage space, reduce storage costs, and improve the overall efficiency of your logistics.
3. Advanced Freight Solutions
With advanced freight management services, including sourcing, customs brokerage, and delivery, we ensure that your shipping is cost-efficient. Our team works with you to calculate the optimal shipping volume, reduce excess cargo space, and save on freight charges. Our Advanced Shipping Notice (ASN) module helps track shipments in real-time, so you stay updated on your freight’s status, ensuring timely deliveries.
4. Global Sourcing and Importing
As a Philippine-based e-commerce enabler, we specialize in sourcing products from China and other key regions. We understand the importance of optimizing shipping costs, especially regarding volume-based charges like CBM. Our services help manage the import process, ensuring you get the best value for every cubic meter of your shipment.
5. Customizable Solutions for Your Business
We offer customized solutions that align with your business needs, whether you’re an e-commerce seller, retailer, or wholesaler. From inventory management to shipping logistics, we ensure that your CBM calculations are aligned with your operational needs and cost-saving goals.
6. Technology-Driven Logistics
With our Fusion SaaS platform, you gain access to real-time data on inventory levels, shipment tracking, and shipping costs. This helps you stay ahead of the game, make informed decisions, and adjust your logistics strategy based on accurate CBM calculations and real-time data.
Our expertise in CBM calculations and shipping logistics can help smooth your business and improve profitability.
Want to optimize your logistics and minimize shipping costs? Contact Inspire Solutions Asia today to learn how we can help transform your business operations with our efficient logistics solutions.
Far from being just a volumetric unit, CBM (cubic meter measurement) plays a pivotal role in enhancing shipping operations and financial efficiency. By understanding and calculating CBM accurately, you can maximize container space utilization, ensuring that every inch of your shipping containers is used efficiently.
Summing Up
This helps reduce transportation expenses and allows you to avoid unnecessary surcharges like dimensional weight penalties, which can significantly increase shipping costs. This also ensures smoother, more efficient deliveries, enhancing operational performance and customer satisfaction.
At Inspire Solutions Asia, we specialize in simplifying logistics through customized warehousing, fulfillment, and shipping solutions. Our expertise helps businesses minimize costs and smooth operations, ensuring seamless supply chain performance.
Let us manage your shipping to better suit your business needs. Reach out for consultations, demos, or more information about our services.
