The cost savings and efficiencies high-volume shippers can gain from packing items in exactly the right size box can be significant.
We’ve all been there — you order a few small things online that arrive in a huge box. Why has the shipper packed them in a box that’s way too big? How do shippers get it so wrong? The question, though, is: How can they get it right? Few people understand the complex world of high-volume parcel fulfillment and the tools, such as advanced cartonization, that can help optimize this process.
Advanced cartonization is a process that uses sophisticated algorithms and software to evaluate the size, shape, and weight of every item in an order to determine the most efficient packaging options. In addition to determining optimal box size and the number of items in each box, it also suggests an arrangement of the items within the carton to maximize space utilization, minimize shipping costs, and minimize the risk of damage to the items in transit.
Typically 3-D modeling creates a virtual representation of the items to be packed in the available cartons. Algorithms then determine the optimal packing arrangement based on the items’ size, shape, weight, fragility, hazmat restrictions, and packing material requirements. The system can then instruct the shipper — the person loading the actual box — what size box to use for which items and how to properly load those items into the box. For example, it could instruct a worker to lay Item A flat, put Item B on its side, and wrap Item C for protection.
How does cartonization work in my shipping operations?
You can integrate cartonization software into multiple systems – typically, it’s a shipper’s Enterprise Resource Planning (ERP) platform, a Warehouse Management System (WMS), an order management system (OMS), or an online shopping cart platform. When a customer places an order, cartonization captures the unique IDs of each SKU, calculates the dimensions of each, and determines the most efficient way to pack them into the smallest box possible.
The rating information is then pushed back to the OMS or shopping cart to assign shipping costs, and the box and packing logic instructions are pushed to the warehouse for the shipper to follow. The box is packed according to the rules, the shipping label is automatically generated, and the package is on its way with the right carrier.
An effective cartonization engine within a parcel shipping platform can make these package decisions in fractions of a second, while also factoring in the shipper’s operational constraints, parcel costs within the shipper’s carrier network, as well as various dimensional pricing factors offered by different carriers. These tools allow high-volume shippers to take the guesswork out of package sizing, resulting in potential cost savings into the millions, an improved carbon footprint, and a significant reduction in cardboard and other packing materials usage.
How does cartonization work in practice?
Let’s look at an example of cartonization at work.
Consider a shipper that regularly ships a certain group of items in a 12x12x8 inch box, but cartonization logic instructs the shipper to use a 12x12x6 box utilizing better packing logic. That seemingly little change – only 2 inches – can reduce dimensional weight for this same shipment down by 25% (from 8 lbs. to 6 lbs.), thereby reducing shipping costs by as much as 10%, or approximately $2 in this particular example. For a shipper that averages 4k+ of these shipments per day, that could add up to more than $2 million in annual savings.
Moreover, removing that 2-inch ring at the top of the box in this example (6” versus 8” tall), reduces cardboard usage by 0.667 square feet per box (another ~10% reduction). If you repeat this one million times a year, the cardboard usage would be 667,000 sq ft, which is roughly 33 tons of cardboard, taking approximately 550 trees to produce. This small, isolated incremental change could therefore save a little over an acre of forest every year.
Right-sizing boxes and packaging material can lead to significant cost savings over time, which is especially important for businesses that ship large volumes of goods or have high shipping costs. Working with the right partner to employ a feature-rich shipping software can be instrumental in applying efficiency-gaining cartonization logic at scale.