You Are Packing Wrong.
Definition of Cartonization
Most shippers know the term cartonization but it’s not a word in the dictionary, yet. Cartonization is the process by which we figure out how to put stuff in boxes, often at the last minute before they go out the door and get put on the truck.
Types of Cartonization
There are a few different kinds of cartonization, most are basic. If you walk into a fulfillment center, you’ll often see some post-it notes slapped onto the warehouse wall. This is as simple as it gets. Then there’s something called liquid fill cartonization. It basically says, this particular item has a total cubic volume of X. Is it less than one of my boxes? It’s pretty simple math.
Then you might have 3D cartonization, which is like 3D Tetris that plays itself. It might generate 3D images and make it a little bit easier for your packers to figure out how to put it all in a box. Finally, and the more modern way of cartonization is what we call 3D plus cost aware.
Conventional wisdom says removing the air out of parcel shipments is the goal. Today, we're trying to lower our carbon footprint. We're trying to minimize our costs by using either operator, tribal knowledge or systems built into our WMSs. We're trying to squeeze the air out of packages.
If you're on the advanced side, you've got box making machinery that really squeezes the air out. While this helps, it’s probably not enough anymore.
Air alone does not deflate the problem
More advanced shippers out there, retailers, 3PLs, they're not just looking at air as a stand-in for cost. They're actually looking at how their real costs affect optimal packing in counterintuitive and sometimes weird ways.
Here is just one example from one single shipment. For UPS, it's actually cheaper to pack it in two medium boxes than one box. But for FedEx, it's cheaper to pack it in one large box with a little bit of extra air in there, and one small box.
How does that make any sense?
Carriers want you to minimize the number of boxes you're giving them for a shipment. They want you to minimize the air in those boxes. But they actually change which one of those things they prioritize, depending on the service type or where you're shipping something - the zone.
If you really incorporate all these factors, not just carrier rates, your negotiated rates, but also the cost of the materials, maybe labor components, if you're able to incorporate all of these things, you're gonna end up with very different packing plans than you might if you were just trying to squeeze air out of your shipments.
Who cares? Here's why you should care.
The difference we've seen between just trying to squeeze air out, and actually incorporating all these disparate cost factors you may have in the packing decision, you can save 6 to 15% on your carrier bill. This is potentially more than the general rate increase (GRI) that you may have just been hit with. Interestingly, this packing style affects sustainability positively which carriers are incentivizing you to pack this way. We can help determine the cartons that match the mode they're going to be on.
For air freight, carriers might be okay with more boxes as long as every single cubic inch is squeezed out of air. If you're just shipping something down the street, they may not want the delivery person juggling a hundred boxes. They may be okay with a little bit of air in there. Incorporating some more factors into the packing and packaging decision can make a huge impact.
Reviewing the changes in your packing process
This begs the question: I changed my packing a little to be a little bit smarter to incorporate some of these other cost factors that may affect it. What does that mean for my packaging? Well, the only way to really know that is to go back to packaging you have today and say, is this actually reflecting the smarter way of packing?
We have talked to a lot of shippers that haven't changed their carton suite in 11 years. What we're seeing is that shippers are starting to think about their actual packing and box suite, and linking it to their disparate costs that we have discussed above.
Conclusion
In effect, they're making their packaging reactive to their actual costs and this is what we find really fascinating after thinking about stuffing things in boxes for the last how many years. The fact is that packaging could be more dynamic, opposed to an exercise that you do every decade or five years.
We have a cartonization API that can help with some of the smarter packing decisions we have discussed. As well as a simulation software that can help you make packaging decisions before you get smarter about packing.
If you would like to watch the full 6-minute presentation given at Manifest 2023, you can watch it here.