sourcehttp://mhlnews.com/
time2016/04/25
Every day, the number of purchases being made online is rising, and so are consumers’ expectations of what the e-commerce delivery experience should be.
To deliver on these demands, companies are looking for new ways to boost supply chain efficiency and get product out the door faster and cheaper—without sacrificing protective performance.
Materials Handling & Logistics recently caught up with Ken Chrisman, president of Sealed Air Product Care, at the MODEX 2016 show, and asked him for his perspective on how companies are dealing with escalating freight costs and what they can do to pack smarter, smaller and faster.
MH&L: At the start of 2016, major carriers introduced significant shipping rate increases. What kind of reaction to these changes are you seeing with the customers you serve?
Chrisman: We spent a great deal of 2015 helping educate companies on these changes to dimensional weight pricing—or dim weight—and helping them prepare and adapt their operations to limit their impact. And we do know that they’re feeling it.
Our survey of 150 customers of varying sizes and industries found that an overwhelming majority—nearly 89%—say they are already seeing an increase in shipping costs due to changes in dimensional weight shipping policies. Of those, 41% report seeing increases of 10% or more.
Now, with more recent shipping rate increases from major carriers, businesses are seeing an even more substantial spike in shipping costs.
But this isn’t a case of freight carriers looking to nickel-and-dime shippers; these changes are emblematic of the overall growth in e-commerce.
Consumer demand for delivered goods is high and getting higher. The expectations consumers have for low-cost or free and fast delivery also continue to increase.
But what’s even more interesting is the growth in what types of items consumers expect to be able to buy and receive via e-commerce. Large items, fragile electronics, food—there’s no limit to what people can and will buy online.
Carriers are having to accommodate higher volume and a much greater variety of items. But there’s only so much space on a truck or aircraft and so many hours in a day. If they’re going to meet demand, something has to give, and that something is size.
Freight carriers are incenting retailers and fulfillment companies to pack smaller—and that’s a good thing. It’s less wasteful—in terms of material needed to pack, but also in the overall energy and carbon footprint required to deliver each order.
Can decreasing the size of a package actually save companies that much money?
Chrisman: Yes, reducing package size, even by a few centimeters or ounces, makes a big difference. We know that because we've been increasing the efficiency of small parcel shippers for more than 50 years, dating back to the invention of Bubble Wrap.
When you invest in packaging solutions that are specially designed to deliver maximum performance with minimal size, each pack will cost less to ship, but you’ll also be reducing the cost of materials over time.
You’d think we wouldn’t want to be in the business of reducing the amount of packaging materials that companies buy, but we are. We want them to use less of what we make because helping companies manage freight costs is really just the beginning.
Real, profitable, top-line growth doesn’t come from cutting down your monthly freight costs or saving a few pennies per pack. That matters in the short term, but top-line growth happens when you are able to add significant speed to your fulfillment operation and grow volume, significantly reduce the risk of damage, and meaningfully enhance the experience customers are having with your brand.
Ultimately, companies should look at packaging not as a cost, but as an investment in growth and in their brand. Integrating flexible automation that can scale up or down to meet demand, bringing the branded polish of primary packaging to the secondary packaging experience, creating custom-designed protective solutions that are rigorously tested under ISTA standards—these are the kinds of packaging strategies that can grow your business—and save on freight cost.
Below is the packing of goods from AfterPrinting.
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