ShipStream CEO Colin Mollenhour Discusses Cartonization for 3PLs

Editor's note: ShipStream is a Paccurate Partner. We sat down with ecommerce veteran and logistics and WMS expert Colin Mollenhour. He explains how ShipStream started and discusses trends and operational issues impacting 3PLs doing business within complex supply chains.

Please tell us how you got into shipping and co-founding the ShipStream start-up.

Mollenhour: I was a key player in a fast-growing ecommerce start-up that quickly outgrew our 3PLs, especially when we experienced fulfillment issues like inaccurate inventory levels. These problems caused oversell issues and created a lot of customer service pain.

Fulfillment is an essential piece of customer service—making sure you're getting the right products to the right customers accurately and quickly, without damage. After our bad busy season experience, we developed a new piece of software from the ground up. Following a couple of years of success with that, we decided to launch ShipStream.

Our niche is ecommerce fulfillment, and we're focused on receiving, processing, picking, packing, and shipping. We work with shipping experts to achieve what's possible with our customers' warehouse management system (WMS) space, products, and team. That means merchants get the reliability they need for matching production to orders and fulfillment; 3PLs get scalable organization required for handling a wide range of customers and sales channels.

Who is your typical customer?

M: Our typical WMS customer is a small-to-medium-sized 3PL or merchant, although 3PLs have more specific requirements for billing and client portals that their merchants can log into. People use a large array of products with our WMS--from pet food to furniture to gaming chairs to hand sanitizers. We handle some LTL, but we're mostly parcel-centric. That's where we excel.

What 3PL trends are you watching at the moment? And what sorts of challenges are 3PLs facing?

M: 3PLs face rising shipping costs. And capacity constraints, especially during the holiday season. Some of our clients have been trying to diversify from the big three U.S. package shippers. We've seen one client consolidate shipping onto trucks that then travel into a more regional area and then to last-mile delivery.

How does cartonization fit into your offering? What do your customers think about it? What typical problems are your customers trying to solve, and how does your offering--and cartonization specifically--solve those problems?

M: Using Paccurate's integration, we built out a system that integrates very tightly into the warehouse early on in the process, splitting the order into packages which then informs all sorts of other processes. Our rate shopping engine can compare rates and allocate what boxes are available at different warehouses. It ties all the decision-making processes into one larger process. Paccurate is definitely a central piece.

For example, a 3PL might have 30-80 different box sizes in a warehouse. That poses many challenges as far as having those boxes at the packing stations and conveniently available to pack into.

Our system does a lot of work around cartonization. You want to find the most efficient box, but it also has to be one stocked in the warehouse. You have to classify the orders into picking classes. We can do that based on boxes. That allows you to pick orders and bring them to a packing station that's already well-stocked for those shipments. If you have 20 boxes at one packing station, 20 boxes at another, and 20 at another, you don't have to have 60 at each location.

So cartonization is not just the final solution--about finding the best box for items—but how does that fit into warehouse operations.

We've had great feedback on Paccurate—everybody from account managers to merchants to pickers and packers, who [can use Paccurate to] see a 3D rendering of the packing solution on their screen. They like knowing they are packing the boxes correctly. We've had nothing but positive feedback. It presents well for our clients when presenting the product, but it also makes end customers much happier.

Paccurate fits into ShipStream's systematic approach to tightening up our customers' inventory and supply chain while reducing waste and protecting margins through continuous improvement--specifically at the warehouse and all the places they can save on time, cost, and stress.

Do you think cost efficiency or sustainability concerns drive the adoption of cartonization--both for your customers and the whole industry? Do you think that will change?

M: We've seen boxes get thinner, to the point where they are just strong enough to make it to their destination. You want to minimize waste if it's in the shape of a cube. We've worked with systems to do on-demand box-building. That's compelling for a low-volume packing environment. We also plan to look more into envelopes and non-rigid or telescoping boxes.

For more information, check out ShipStream here.