The Bonus? Brands and 3PLs Can Save Big on Shipping Costs

What I wouldn’t give to have had accurate product dimensional data back in the day.

Warehouse workers spent years using tape measures to pick boxes for inbound and outbound shipments. Scanners offered improvements, but they’re often too slow.

So, we go back to tape measures or not worrying about packaging optimization. This means stuffing small items into larger-than-necessary boxes. Skyrocketing eCommerce has increased the problem.

Customers make fun of this waste. These packaging failures show up on the nightly news or in YouTube videos. Your shipping costs increase.

That’s why I’m excited about today’s packaging solutions that offer accurate product dimensional data.

The correct dimensions help you select the right box. This goes beyond saving time, material, freight costs and parcel costs. Damage, storage and handling issues decline.

Believe me, right-sized boxes can do a lot of good. They help clean up messy, inefficient warehouses, distribution centers or fulfillment centers.

Packaging Optimization Improves Productivity, Warehouse Planning, Cube Utilization

Without accurate product dimensions, proper warehouse planning and slotting is next to impossible. I have been in many a warehouse with incorrect racking and slotting, product all over the place. Cube utilization is a disaster.

The whole thing is a mess.

Correct product dimensions and actual packaging data help you use the right box. Fewer oversized boxes can help you reduce racking requirements by 25% to 40% or more.

And it’s up to the brand, the warehouse manager or the 3PL to measure fill rates in real time.

Reducing cardboard or filler material does nothing for the bottom line of your packaging suppliers. Most cartonization algorithms do not perform geometric calculations to select the right box. And you have to keep too many corrugated SKUs on hand. The right packaging optimization evaluates fill rates, quickly adjusts sizes and monitors your box mix on a regular basis.

Packaging optimization leads to accurate warehouse and freight planning, accurate freight manifests and better cube utilization. I have seen floor space utilization improve by 84%.

I have seen packaging optimization reduce corrugated SKUs by more than 90%. Productivity increases sometimes top 100%.

All because you now have a warehouse that’s not a mess.

Size Matters in Shipping Costs – Particularly in eCommerce

Size matters in shipping costs.

With the growth of eCommerce, parcel carriers lost big money filling trucks with lightweight items in oversized boxes. The boxes take up lots of space, increasing costs for not much revenue. That 6-by-6-by-2-inch box with a 4-ounce computer mouse killed profit margins.

So, parcel carriers started charging based on dimensional weight (essentially box size) or actual weight – whichever one was greater. Dimensional weight is the amount of space a box occupies in relation to its actual weight.

Use smaller boxes, and 3PLs and brands can save big on shipping charges and packaging material.

Big boxes and small items mean you’re paying a lot to ship air. I’m not a math major or a calculus wiz, but I can guarantee the ROI on shipping air is pretty much zilch.

The ROI on a packaging solution thar reduces air in the box from 60%-75% to 30%-40%? That ranges from 400%-600%.

I have seen proper packaging optimization reduce pack material weight by almost 35% and damage by 90%.

If You Ship Anything in Boxes, You Need Packaging Optimization

Packaging optimization can benefit any organization that ships anything in a box. Service parts distributors, eCommerce sellers and definitely 3PLs.

In my opinion, 3PLs have a fantastic opportunity to add packaging optimization to their services. Many have trouble maintaining a steady client base. The churn rate is significant.

Production dimensional data is data. Data that 3PLs can use to save their clients millions of dollars in shipping, material and handling costs.

What client will throw that away when it comes time for contract renewal?

Packaging Optimization: An Inexpensive Start, a Massive ROI

Getting started doesn’t require a million-dollar investment.

Initial cleanup might only require weeklong training of two associates. Monthly maintenance costs are low. ROI can be massive.

The best case I’ve seen involves a large eCommerce retailer. Monthly costs, including technology, are $12,000 per month. The results?

  • 22% reduction in shipping costs
  • 10% reduction in packaging costs
  • 30% reduction in CO2 emissions

This translates into annual freight, packaging and labor savings of $2.5 million – a massive 1,736% ROI.

Get On the Good Side of Your Warehouse Operators

I don’t want to go back to the days of working in and managing a warehouse. I’ve done my time.

But I know it would be a lot easier with today’s technology.

Are you shipping too much air? Is your warehouse a mess? (Or maybe just not as efficient as you want it to be?)

I’d love to talk to you about packaging solutions that really work.

Trust me, your warehouse management and personnel will thank you.

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