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er, will have little incentive to invest in new technology, add
more box sizes, or re-engineer packing stations in a bid to
drive down shipping costs if it won’t see any of the benefits
or share in the savings.
“Who’s going to make that tradeoff?” asks Ampuja. “The
3PL is charged with driving the warehousing costs down. It
may [not] even control the freight costs. Those [savings] go
directly to the client.” Under the circumstances, it’s not hard
to understand why a 3PL would be reluctant to make that
investment.
LET’S WORK TOGETHER
To avoid these kinds of miscommunications and misunderstandings, experts advise shippers and providers to take
a collaborative approach to cutting shipping costs. The first
step, according to Ampuja, is just sitting down with your
3PL provider and having a discussion about packaging and
dim weight concerns. (If the 3PL lacks expertise in packaging
optimization, Ampuja suggests calling in another outside
expert, such as a packaging engineer, supplier, or consultant,
to participate in these conversations.)
One avenue that’s likely to come up in the discussions is
the deployment of technology—specifically, dimensioning
equipment. Also known as cubing and weighing equipment,
dimensioning devices use sensors to calculate the exact
dimensions of a product or package. As for how that affects
shipping costs, determining a product’s precise dimensions
reduces the likelihood that order packers will choose a too-large box, explains Justin Headley, marketing manager for
CubiScan, a company that makes dimensioning equipment.
If left to rely on their own estimates, order packers will select
a bigger box than necessary 25 percent of the time, according
to data from Supply Chain Optimizers. As a result, they end
up using more packaging than they need, creating enormous
waste and unnecessary shipping expense.
If the price of the equipment is an obstacle, cost-sharing
may offer a solution. For example, Ampuja is currently working on a project that involves the installation of two dimensioning systems, with the customer paying for one system and
the 3PL paying for the other.
Another path to optimizing packaging—and thereby, cutting shipping costs—is to involve 3PLs early on in the product development process, say both Thompson and Johnson.
“Once you get the product made, packaged, and palletized
for shipment, it’s a fixed game,” says Johnson. At that point,
there’s little you can do to reduce shipping costs.
If you bring your 3PL into the discussions at an earlier
stage, however, it will have a chance to offer suggestions
before the packaging is designed. It might even be able to
suggest design changes to the product itself that will make it
easier to ship.
Long story short, there are ways in which 3PLs can help
shippers reduce the costs associated with dim weight pricing.
But as is so often the case, it will require the shipper to view
its 3PL as a partner and to treat it accordingly.
