Packaging Corner: Keep DIM weight shipping charges under control

Industry research has pegged e-commerce fulfillment growth at a compound annual rate hovering near 10%. But Brandon Brooks, vice president of strategy and marketing at Packsize, suspects the rate of increase is actually faster.

“That’s because companies that weren’t once considered e-commerce, such as manufacturers and retailers, are finding themselves in the fulfillment business due to customer demand,” Brooks explains.

To help companies manage the demands of e-commerce fulfillment, Packsize’s equipment creates right-sized secondary packaging on-demand—automatically building a box that closely matches the dimensions of the item (or items) to be shipped in it.
Companies typically stock five to 12 shipping carton sizes to fit most of their shipments. The choice of which box size is best for shipment is frequently left to a packing station operator, who adds void material (like air pillows, kraft paper or foam peanuts) to fill empty space before sealing the box.

With major parcel carriers like FedEx and UPS switching to shipping fee calculations based on both package weight and size, or dimensional weight (DIM weight), as of Jan. 1, 2015, Packsize estimates that 77.9% of business-to-consumer—and 76.9% of business-to-business—shipments will be impacted. Due to this shift, Brooks says the company has been fielding more inquiries about its on-demand packaging systems.

“Most companies estimate that DIM weight charges will increase their shipping costs by approximately 30%,” he says. “Because our systems reduce box volumes by 40% on average, shipping in a right-sized box minimizes those costs.

“Ideal users of our solutions have a considerable amount of variability in their shipment sizes; they use roughly 500 boxes a day for standard-sized shipments, or 100 boxes for larger goods, such as furniture and cabinetry,” he adds.

Because implementing an on-demand machine means converting to a new packaging process, the company’s business model is to install a machine at no cost, says Brooks. “The user pays only for the corrugated material. It’s a low-risk way for users to try out on-demand packaging, plus helps us better align with our customers’ needs.”