What is CBM in shipping & how to calculate it

Shipping goods internationally can be tricky, especially for new SMBs. Even if you strike a million-dollar trade deal, your profit depends a lot on shipping costs. 

So how do you calculate them?

Well, one key term to learn about is CBM or Cubic Meter, which is used to calculate shipping costs.

Whether you're new to this activity or want to make your logistics smoother, you need to understand the basics of CBM.  

What is CBM?

CBM stands for Cubic Meter, and is used to calculate the shipping volume of your cargo, either domestic or international. It's a volume measurement that considers the length, width, and height of the cargo. Companies use this indicator to determine the shipping cost.

What is CBM in shipping?

CBM is widely used because shipping costs are often based not only on weight but also on the volume of the cargo.

For instance, lightweight but bulky items might take up more space in a container, leading to higher shipping costs. Here's a quick rundown of the key elements of CBM:

1. Gross weight 

Gross weight refers to the actual weight of the package and is usually measured in kilograms, tons, or pounds.

For reference, 1,000 kilograms equals 1 ton.

2. Dimensional weight

Dimensional Weight or DIM Weight or Volumetric Weight, refers to the calculated weight of the cargo when its volume is greater than its actual weight. Dimensional weight can be calculated using these formulas:

CBM x DIM Factor = Dimensional Weight

(Length x Width x Height x Quantity) / DIM Factor = Dimensional Weight

Here, "Quantity" refers to the number of packages in your shipment.

The DIM factor (dimensional weight factor) changes depending on the shipping method (sea, air, courier, truck) and the carrier you're using. Generally, the DIM factors are:

• Sea freight: 1:1,000 (1 m³ = 1,000 kg)
• Air freight: 1:6,000 (1 m³ = 6,000 kg or 1:167 for CBM formula)
• Courier/Express freight: 1:5,000 (1 m³ = 5,000 kg)
• Road freight (LTL): 1:3,000 (1 m³ = 3,000 kg)

These factors can differ, so always check with your service provider.

3. Chargeable weight

This is the number that really counts when figuring out shipping costs. It's either the volumetric weight or the gross weight, whichever is more. This is important for determining pricing in air freight, sea freight, or trucking.

4.  Freight class

Different countries use a special number to make sure truckers get paid fairly for hauling oversized loads. Most packages shipped by truck fall into simple freight class categories, which are based on weight.

And CBM plays a big role in figuring out these classes by calculating the freight density. 

Density is one of the crucial factors for determining freight class.

Freight Density = Weight of Shipment / Volume in CBM

Higher density means a lower, cheaper freight class, and lower density means a higher, more expensive class. 

So, whether you're shipping by air, sea, or road, knowing your CBM helps ensure you're paying the right amount! 

Read more: How to calculate customs duty?

How do you calculate CBM in shipping?

Calculating CBM is straightforward. Measure the length, width, and height of your shipment in meters and use this formula:

Length (m) x Width (m) x Height (m) = CBM (m³)

For multiple identical items, just multiply the CBM by the number of items.

For example, you have 50 boxes of 2m (l) x 2m (w) x 2m (h). So the total volume of the cargo will be:

Volume of each box (m³): 2 x 2 x 2 

Volume of each box (m³): 8 CBM

Volume of Total Cargo: 8m³ x 50 boxes

Volume of Total Cargo: 400 CBM

If you have different-sized items, calculate the CBM for each one individually and then sum them up. Easy!

But here’s the catch: Air, sea, and land all use different dimensional weight factors. Let’s better understand it with an example.

1. Calculating CBM for LCL sea freight

For LCL sea freight, when you’re shipping less than a container load (LCL), your cargo will be transported in a shared container with other shipments. LCL shipping is ideal for moderate volumes of cargo that don't fill an entire container. 

Freight charges for LCL are typically calculated based on cubic meters (CBM) if the cargo weighs less than one ton (1,000 kg).

However, if the cargo exceeds one ton, charges are usually based on weight. 

Example:

• Package dimensions: 1.5 m x 1.5 m x 2 m
• CBM: 1.5 x 1.5 x 2 = 4.5 m³
• DIM factor: 1:1,000
• Gross weight: 4,500 kg (4.5 ton)
• Freight rate: $40 per CBM/ton

Since the gross weight is higher than the volume, the freight is charged based on the gross weight. So, the freight cost is $40 x 4.5 = $180.

2. Calculating CBM for air freight

Let's use the second formula to calculate dimensional weight – Length (m) x Width (m) x Height (m) / DIM Factor – with a DIM factor of 1:6,000 to determine the freight cost.

Example:

• Freight rate: $120 per CBM/ton
• Package dimensions: 120 cm x 80 cm x 80 cm
• Gross weight: 180 kg (0.18 ton)

Dimensional weight is calculated as: 120 x 80 x 80 / 6,000 = 128 kg (0.128 ton)

Since the dimensional weight (128 kg) is greater than the gross weight (180 kg), the chargeable weight is the dimensional weight.

So, the freight cost is 0.128 x 120 = $15.36.

3. Calculating CBM for road (Truck LTL) freight

For road freight (Less than truckload or LTL), we use the formula Length (m) x Width (m) x Height (m) / DIM factor to find the dimensional weight, with a DIM factor of 1:3,000.

Freight rate: $60 per CBM/ton

Package dimensions: 150 cm x 80 cm x 60 cm

Let's break it down:

Dimensional weight: (150 x 80 x 60) / 3,000 = 240 kg (0.24 ton)

Gross weight: 175 kg (0.175 ton)

Since the dimensional weight (240 kg) is greater than the gross weight (175 kg), the chargeable weight is the dimensional weight.

Thus, the freight cost is 0.24 x $60 = $14.40.

Remember, the freight rates mentioned here are just for example purposes. Always check the current rates with your service provider to enhance your supply chain finance.

How do you calculate CBM for irregular shapes?

All the dimensions and calculations we've talked about so far have been for regular-shaped packages, like cubes or cuboids. For these, you can use the simple formula Length x Width x Height = CBM. But what if your package isn’t a perfect shape? Here’s how to handle that:

1. Cylindrical Package

Let’s assume it’s rolled carpets or pipes. Stand the package upright and measure its height and radius (half of the diameter) in meters.

Then, use the formula π x r² x h = CBM, where:

π (pi) is about 3.14

r is the radius

h is the height (same as the length)

2. Irregularly Shaped Package

For oddly shaped items, measure the longest length, width, and height.

Then, use the formula Length (max) x Width (max) x Height (max) = CBM.

By using these methods, you can accurately determine the CBM for any package, no matter its shape.

How does CBM determine shipping costs?

While CBM is essential for calculating freight charges, it’s also crucial for figuring out additional fees and surcharges.

Here’s a breakdown of what you might encounter:

• Terminal handling charge: This covers the cost of using the facilities, equipment, and labor at both the origin and destination terminals.

• Internal haulage charges: These are the costs for moving the cargo between the container depot or freight station and the loading port, and vice versa.

• Bunker adjustment factor/fuel adjustment factor: These surcharges adjust for fluctuations in fuel prices.

• Currency adjustment factor: This extra charge accounts for changes in currency exchange rates for international shipments.

Worried about the currency risks? Learn more in Types of risks in international trade and how to mitigate them.

Take control of your shipping strategy!

Shipping might seem like a puzzle, but understanding CBM is a critical piece that can bring clarity to your strategy.

By knowing how to calculate it, you’re not just ticking a box—you’re gaining control over your shipping costs, and optimizing container space.

But even with the best planning, the shipping process can be unpredictable. That’s where financial flexibility becomes your safety net.

Our alternative financing solutions can help you unlock capital tied up in shipments, giving you the cash flow you need to keep your business running smoothly, even when challenges arise.

So, the next time someone asks about your shipment’s CBM, you’ll have the answer—and the confidence to glide the waters of shipping with ease.

Ready to make shipping more efficient and stress-free? Explore how Stenn’s alternative financing can support your business’s growth by unlocking your capital today!