We’ve all had the experience of ordering a product the size of a toothbrush only to have it delivered in a shipping carton the size of a shoe box.
Somehow, it just feels…wrong. And that’s not brand right.
Mistakes happen when packing product for shipment. But with parcel size being a major component of shipping costs, these mistakes can quickly add up to a major drain on profitability.
Don’t blame the folks on the packing line.
Employees packing parcels simply don’t have the time to consider all the costs associated with a shipment before selecting the best box or envelope to use considering product protection requirements, parcel size, parcel weight, carrier requirements and limitations, carrier standard and negotiated rates, and other factors.
The answer is cartonization.
Cartonization automates the process, selecting the best packaging option for each order – or multiple options if it makes sense to split the order.
Cartonization maximizes margins by optimizing shipping, packaging and picking costs on every order.
Cartonization is the process of evaluating items included in an order to determine the number, size and type of shipping cartons needed. The cartonization module determines the best way to pack each carton given the product dimensions, weight and any special handling requirements of each item in the order. Each item is considered separately and in combination with all the other items to be packed. The cartonization logic also checks to see if splitting the order into multiple cartons makes sense as carriers often charge less for smaller packages.
Don’t confuse cartonization with “box on demand” equipment that wraps corrugated cardboard sheets around a pile of items on a conveyer belt to produce a custom box for each order. While that technology is impressive, it lacks the intelligence to put the right items on the conveyer in the right configuration to reduce shipping expense.
See how Etail clients cut their shipping costs by an average of 21%. Check out our white paper: Shipping Cost Reduction: The Biggest Ecommerce Profit Driver That You’re Probably Ignoring. Click here to download.
Cartonization algorithms are designed to factor in package size, weight and dimensions; product protection needs; customer and marketplace delivery expectations; carrier rate and configuration requirements and other business rules to recommend the optimal parcel size and carrier for each order.
For example, cartonization can:
- Assign orders to be shipped whenever possible in carrier flat-rate shipping packages, “shopping” among carriers for the ideal package size and lowest shipping cost.
- Split large orders to fit into multiple smaller shipments to adhere to shipper weight and size limitations, then supply the marketplace or customer with the right tracking information for the multiple shipments. For example, one Etail auto supply client needed to ship four tires to its customers – incurring expensive charges for excessive package size and weight. Cartonization directed that the tires be split up into two packages – which met carrier requirements without extra charges. Sounds easy enough to do – but this client ships thousands of tires a day and some types of tires are too large or too heavy to combine, so single tire shipments make sense. Cartonization was the only way to scale the packaging decision.
- Determine what items should be packaged together. For example, you probably wouldn’t want to ship cleaning supplies and fresh bakery goods in the same package.
Cartonization offers ecommerce sellers several benefits:
- Orders are optimized to ship at the lowest possible cost that still meets the customer’s delivery expectations.
- Packing is optimized to fill each carton. When orders are packaged as efficiently as possible, the cost of cartons and packaging materials is reduced.
- Properly packed orders also reduce the chances of product damage during shipping, lowering the number of returns and boosting customer satisfaction.
- Picking and packing operations are made more efficient. Packers don’t have to decide which cartons to use or have to repack boxes when they make a mistake. Workers also can pick items directly into the final shipping container with the correct label. That means a greater number of orders can be filled per employee with a lower cost per order.
Plus, because cartonization is focused on reducing shipping costs, that usually involves reducing package size and weight, an important factor in addressing customer and corporate sustainability concerns.
Interested in learning how cartonization can cut your shipping costs, boost margins and increase customer satisfaction? Reach out. We’re here to help.
Shipping Cost Reduction: The Biggest Ecommerce Profit Driver That You’re Probably Ignoring
Shipping Cost Reduction [Infographic]
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