Reducing Packaging Costs
While most businesses are ramping up for peak season, some parcel carriers sent their own early greetings with holiday surcharges. Fortunately, that doesn't mean your company has to raise prices or take a financial hit. Try these packaging moves to help offset higher parcel costs farther up the supply chain, says Rajiv Saxena, supply chain solutions head for APL Logistics.
1. Get smart(phone) about using the right box sizes. Using a larger-than-specified box to ship a product is a mistake many product pickers can easily make. Have employees or supervisors at your fulfillment centers take smartphone photos of some packed boxes before they're sealed. That way someone higher up the chain can check these images to ensure proper product-to-box alignment is taking place.
2. Spot the signs of inefficient packaging configurations. Be aware of packaging inefficiencies such as excessive amounts of interior stuffing in a box; empty space when packages are opened; cardboard boxes, plastic containers, or filler materials that need to be hauled away from your distribution centers.
3. Go with durable, reusable packaging. About one-third of e-commerce orders are returned. Be mindful of how well any packaging materials you use will hold up under multiple possible journeys. That way, your still-salable goods will make it safely through the reverse transit process.
4. Update your dimensional information. Encourage your Lean or engineering professionals to spend a few weeks measuring the contents of your outgoing trucks. Then run new trailer cube utilizations with this refreshed data to reduce transits.
5. Build and test prototypes. Work with the packaging materials and configurations your simulations have helped you select. Real-world experience reveals which packaging recommendations are as durable, executable, and feasible as proposed.
6. Recheck your freight classifications. With significant differences in the cost to transport each of the National Motor Freight Traffic Association's 18 different classifications, it pays to periodically check to ensure all freight traveling in your packages is being classified correctly.
7. Create clear deterrents for supplier overpackaging. The typical supplier contract levies penalties for product damage, not excessive packaging costs. Include contractual language that holds suppliers equally accountable for packaging efficiency.
8. Don't hesitate to replace or refurbish. If the exterior packaging on an item has accumulated dust, dirt, or any other form of wear and tear, a customer could refuse delivery. Wipe the packaging down or even replace it to minimize returns and reshipments.
9. Look into impact, shock, or tilt indicators. These devices let you know when a potentially damaging behavior such as jolting or bumping has taken place, adding accountability to package handling. They also allow you to assign financial penalties.
10. Dispense with your disposal. Don't just eat the cost of your plastic/cardboard waste's haulaway and disposal (close to $200 per ton). Many businesses such as polymer companies need this kind of trash—and some are willing to haul it away for free or pay for it. Look into this option for packaging disposal savings.