DC Velocity - December 2014

Such packaging habits result in wasted space. “Forty percent of total shipping volume is unnecessary air,” says Hanko Kiessner, CEO of Packsize, a company that provides on-demand packaging systems that enable users to build custom cartons. “If we can reduce shipping volume by 40 percent, we can actually increase fleet efficiency by 66 percent.”

KNOW YOUR NUMBERS

So how can companies avoid high parcel shipping charges? The first step is to talk to the carriers. Many companies have negotiated rates, so it remains to be seen if, or by how much, the pricing changes will immediately affect them. Experts emphasize that the time for shippers to act is well before their contracts are up for renewal. “If your water bill goes up, you turn off the sprinklers,” quips CASI’s Walsh.

The second step is to know what is actually being shipped. “You can’t make intelligent packaging decisions if you don’t know the [dimensional] volume of your products,” says Walsh. Few companies know their product characteristics, especially those companies that have a constant churn of stock-keeping units (SKUs). But knowing the actual weight and size of products can pay big dividends. It can make handling easier, optimize storage space, and save on shipping costs. If you know the size and weight of each item shipped, you can then optimize how the items are packed so you’re not paying to transport air.

As for how you can get those dimensions, there are a number of ways. Sometimes, suppliers will provide you with that data. But more often than not, shippers have to gather the data themselves. They can measure and weigh products manually using a tape measure and a scale, but this can be very time consuming. Another option is to use automatic dimensioning and weighing systems. Not only are these systems much faster and more accurate than manual data capture, but they can help take the guesswork out of the carton selection process. The systems can transmit the weight and dimensional data they capture to a warehouse management system and shipping software. The software then guides packers in choosing the best packaging for the product, including the correct size carton and the amount of dunnage needed to protect its contents. Some systems will also tie into a computer screen to display the optimal way to arrange products within the carton—for instance, with heavier items on the bottom and lighter ones on top.

In addition to being used to collect data on individ-
ual SKUs handled at the facility, automated dimen-
sioning systems can be installed at the end of the line
to capture information about each package in a ship-
ment. This information is then passed along to the
carrier and can also be used for customer billing. “It
is important for shippers to include the dimensions of
the parcel when processing their ground shipments. If
they don’t, they are likely to receive significant ‘back-
charges’ from their carrier, which cannot be passed
back to the shipper’s customer,” notes Randy Neilson,
director of sales and marketing for Quantronix, the
manufacturer of CubiScan dimensioning systems.
“The system will collect the parcel’s ID/order license
plate number as well as its length, width, height, and
weight,” he says. “All of this information is then elec-
tronically transferred and integrated with the user’s
shipping software system.”
Such systems are certified as legal-for-trade dimen-
sioning and weighing systems. Therefore, the infor-
mation they gather may also be useful in settling any
billing disputes that might arise with the carrier or
customer.

CARTON CORRECTION

Another way to address shipping costs is to evaluate the packaging you’re using to see if the cartons you employ are the best ones for your needs. Consultants like Ampuja can help shippers determine carton characteristics, the number of cartons that are ideal for their products, and the sizes those cartons should be. “Six box sizes are about optimum for manual operations,” Ampuja says. Companies that use computers to select the proper box size really have no limit on the number of boxes they employ but typically use about 15 to 18 boxes, which will provide more freight savings, he says.

Ampuja notes that shippers are sometimes reluctant to increase the number of boxes they use because they feel it will complicate their operations. However, expanding their carton lineup can save money if the cartons are a better fit for their products, he says, especially if computers handle the carton selection. “The money is in the freight, not in the box,” Ampuja says.

Making even minor changes in the boxes’ dimensions can also greatly affect the dim weight. For example, simply trimming a half-inch off the length, a quarter-inch off the height, and so on can save significant money when multiplied by thousands of boxes.