By now, we have all become intimately familiar with the phrase “tough economic times”. Today’s challenges require us to think outside of the box to find savings opportunities. However, perhaps what we need to think about is the box.
First, evaluate the various box sizes being utilized. Are these the ideal box sizes, or could a new box size offer opportunities to reduce costs? Do many of your customers order a product in a certain quantity that makes it beneficial to consolidate smaller boxes into an over pack?
Next, take a look at your invoice data from your parcel carriers to find out how often shipments are being invoiced at a dimensional weight versus the ship weight. This additional billing weight could be jeopardizing your transportation budget. Is there a specific product or box size causing many of the occurrences? Is it possible to reduce the box size or ship multiple smaller boxes to avoid excess weight and possibly large package and oversize accessorial fees? These fees often add $55 or more, per package, to your shipping costs. If you find that there are not opportunities to make the boxes smaller, then work with your parcel carrier to increase the dim factor used in calculating the bill weight and request a reduction in oversize and large package fees.
I think we have all ordered something at one point or another in which a small item was shipped in a big box or multiple packages were shipped when both items could have fit in one box. Watch the orders being pulled and packaged to validate that the box space is being maximized. Many WMS systems will indicate which overpack box should be used based on the products ordered, allowing room for dunnage. The settings could be incorrect, allowing for too much dunnage. Sometimes the dimensions of the items to be overpacked has changed, so this should be periodically reviewed.
In addition to looking at the packaging used for shipping purposes, evaluate the packaging of the item itself that is being shipped. Is there any way to reduce the weight of the item being shipped, which in turn can reduce transportations costs? For example, if the product being produced and sold is in a glass container, consider converting to plastic containers to reduce the ship weight, which then reduces the transportations costs.
When looking for savings opportunities, thinking about the box could net significant savings.