Looking to get a better handle on your freight and transportation costs in the new year? It may be time to take a good, hard look at your packaging strategy and to consider switching from a standard approach to right-sized packaging, a process that utilizes automated, on-demand box creation.
Right-sizing solutions have been around for years, but experts say the industry is just now reaching a tipping point where value and savings can be seen in black and white—and where changes made inside the warehouse can make a big difference on the outside.
“Really, in the last year, we’ve been able to prove on paper—with historical data from freight companies, partners, and brokers—that the cost savings are substantial. More than we even thought,” says Brian Reinhart, chief revenue officer for right-sized packaging solutions provider Packsize. “We have tools that show that, on average, customers that right size will save somewhere between 20% and 30% within their freight operations as opposed to when they did not right-size.”
That’s a big number, and one that’s directly tied to shipping and transportation costs. Quite simply, by using the smallest possible box for an order, you can fit more orders on a pallet and in a truck, which reduces your freight burden, Reinhart adds. When combined with other benefits such as materials reduction and labor savings, right-sized packaging may finally be taking its place at the cost-reduction table.
Here are three ways right-sized packaging can make a difference in a company’s bottom line.
REDUCING MATERIALS USAGE
Right-sizing allows companies to reduce the amount of packaging materials they use by fitting the box to the order. That way, they’re not putting small items into a too-big box and filling the extra space with dunnage. Plus, it cuts down on the number and variety of boxes companies need to have on hand: Auto-boxing systems use a continuous cardboard material called fanfold, which is folded into a bale and cut to size for each order.
“Right-sized auto-boxing eliminates the need to store multiple box sizes and additional void-fill materials,” explains David Gray, senior vice president of sales for on-demand packaging supplier Sparck Technologies. “Switching from standard stock boxes to fanfold cardboard can reduce corrugate material usage by an average of 29% and material costs by an average of 38%.”
Those actions can also help reduce shipping fees.
“Carriers typically charge based on package size and weight,” Gray adds. “Automated right-sized packaging solutions prevent excess air or volume in boxes, making each shipment as compact and lightweight as possible.
“Even small weight reductions can drive significant savings in overall transportation costs. Choosing the smallest, safest packaging fit for each item is a crucial strategy for effectively managing rising shipping rates.”
TRIMMING TRANSPORTATION COSTS
Here’s another way to think about transportation savings: The more boxes you can fit on a truck, the fewer trucks you’ll need.
“[Right-sizing] also adds flexibility into the network planning and route optimization of those trucks,” Reinhart explains, noting that a truck with more orders on it can make more stops, eliminating the number of empty miles that truck has to travel.
“You want to spend time loading and unloading. Driving time is inefficient time. So the more products you can fit on the truck, the more efficient [you are].”
Gray agrees, adding that optimizing load capacity can also help companies meet sustainability targets.
“[Right-sizing your packaging] reduces the number of vehicles required, resulting in lower shipping costs and a smaller carbon footprint,” he says. “As companies prioritize sustainability and efficiency, right-sized packaging aligns with these goals, helping to streamline logistics while minimizing environmental impact.”
OPTIMIZING LABOR
Gray says automated fit-to-size packaging technology can reduce labor costs by an average of 88% and eliminate up to 20 packing stations. This helps alleviate the stress of finding warehouse labor, which is particularly challenging during peak periods.
Reinhart adds that right-sized packaging can help make other operations in the warehouse more efficient as well. He points to manual tasks using picking carts as an example. Many large distribution centers will have hundreds of workers pushing carts throughout the facility and picking items directly into boxes positioned on the carts. Right-sizing those boxes allows workers to fit 20% to 30% more onto the shipping cart, he says.
“Now, you can put 10 boxes on the cart, whereas before you could only put six or seven,” Reinhart explains. “So you need fewer operators.”
Those labor savings can, in turn, benefit other parts of the business.
“Since labor costs account for a significant portion of a warehouse’s budget, any reduction in these expenses can have a profound impact on a company’s bottom line,” Gray explains. “Lower labor costs mean increased profitability, which can be reinvested into the business to drive growth and innovation. By minimizing labor expenses, companies can offer customers more competitive pricing, leading to increased market share and customer loyalty.”
Those benefits are increasingly putting a spotlight on packaging—making it a critical area for cost-containment and cost-reduction strategies, according to Gray.
“By optimizing packaging sizes, companies can reduce waste, lower shipping expenses, and improve overall operational efficiency, making it a valuable focus area for managing rising costs,” he says.
Reinhart concurs.
“What we’re really seeing now is people looking for things you can do inside the warehouse to create value outside the warehouse—and that’s where right-sized packaging [fits in],” he says. “If you can create that [value], it becomes a no-brainer for the customer.”
