diff --git a/d2layouts/d2dagrelayout/layout.go b/d2layouts/d2dagrelayout/layout.go
index 91aef8dc9..be2f69998 100644
--- a/d2layouts/d2dagrelayout/layout.go
+++ b/d2layouts/d2dagrelayout/layout.go
@@ -127,27 +127,24 @@ func Layout(ctx context.Context, g *d2graph.Graph, opts *ConfigurableOpts) (err
 		}
 	}
 
-	maxLabelSize := 0
+	maxLabelWidth := 0
+	maxLabelHeight := 0
 	for _, edge := range g.Edges {
-		size := edge.LabelDimensions.Width
-		if !isHorizontal {
-			size = edge.LabelDimensions.Height
-		}
-		maxLabelSize = go2.Max(maxLabelSize, size)
+		width := edge.LabelDimensions.Width
+		height := edge.LabelDimensions.Height
+		maxLabelWidth = go2.Max(maxLabelWidth, width)
+		maxLabelHeight = go2.Max(maxLabelHeight, height)
 	}
 
-	rootAttrs.ranksep = go2.Max(100, maxLabelSize+40)
-	vSep := go2.Max(rootAttrs.ranksep, maxContainerLabelHeight)
-	// var nonContainerVSep int
 	if !isHorizontal {
-		rootAttrs.ranksep = vSep
+		rootAttrs.ranksep = go2.Max(go2.Max(100, maxLabelHeight+40), maxContainerLabelHeight)
 	} else {
+		rootAttrs.ranksep = go2.Max(100, maxLabelWidth+40)
 		// use existing config
 		rootAttrs.NodeSep = rootAttrs.EdgeSep
 		// configure vertical padding
-		rootAttrs.EdgeSep = vSep
-		// non-containers have both of this as padding
-		// nonContainerVSep = rootAttrs.NodeSep + rootAttrs.EdgeSep
+		rootAttrs.EdgeSep = go2.Max(maxLabelHeight+40, maxContainerLabelHeight)
+		// Note: non-containers have both of these as padding (rootAttrs.NodeSep + rootAttrs.EdgeSep)
 	}
 
 	configJS := setGraphAttrs(rootAttrs)