GTS Blog

5 Costly Packaging Mistakes

Posted by Ascent Global Logistics on Mar 29, 2017 2:13:37 PM

5 Packaging Tips

Keeping costs low within your supply chain can require a great deal of effort, however, the impact can be dramatic. While most companies explore their inbound shipping process, outbound warehouse procedures, or increase communication between departments, for example, many overlook packaging. However, is a box just a box to your organization, or does it convey more?

The way you ship reflects on your brand and your company’s values. It represents your company’s environmental values and footprint, prevents damages and conveys your brand. Shipping materials can also be a great cost to your organization. Switching to a stronger box could have a cascading impact on cost for your entire supply chain. While you cannot simply avoid purchasing boxes, there are many ways you can reduce cost within your supply chain by examining what materials you are using to ship and how you are shipping. Below are 5 key packaging mistakes that lead to inefficient and high transportation costs.

1. Get organized & streamline

It may seem obvious, but in order to truly discover all the opportunities to cut costs you need to create a master list of everything that is shipped from your organization. This list should include more than your outbound shipments, but also what others ship. For example, marketing may send out boxes to your outside sales team with promotional items or finance may have to ship stacks of bills of lading to multiple customers. Once you have a solid foundation of what is shipped and how, you can begin to start streamlining packaging materials. Rather than each department managing their own processes their own way, create a more standardized way of shipping.
Likewise, encourage greater communication between departments, especially when it comes to logistics. This will provide greater opportunities to fill trucks and become more efficient. Rather than require dockworkers to be present for 3 individual department shipments, try to streamline to reduce shipping fees, worker time and less congestion at your docks.

2. Stop oversimplifying & optimize

Shipping is a complex process, especially for ecommerce organizations. It takes strong strategic planning to truly optimize and cut costs. A new trend we are seeing, especially with ecommerce organizations is immediacy. Once a purchase is made, consumers expect their product almost immediately. Since time is the major driving factor, many organizations overpay to ship their product. Too often we see warehouses select the wrong type of packaging in a rush (either over or under stuffing), leading increased fees and damages. Likewise, ecommerce focused organizations have an abundance of SKUs to process. Even predictable packaging can be challenging to optimize due to the overwhelming amount of packaging options and methods. Most workers select the wrong box or packaging material 25% of the time, leading to greater waste or poorly packaged materials. The key is to find the right balance between product protection and cost. Too little packaging leads to increased risk of damages, waste, return shipping costs and low customer trust. Utilizing too much packaging will also be costly and poorly impact the environment, leading to poor brand perception.

3. Select the BEST material

Put some time and consideration into what shipping methods and materials are a best fit for your needs and goals. First consider sustainability. Finding greener alternatives will be more cost effective and easier to recycle. This has a direct impact on your brand. The ‘greener’ your company is, the more your customers will appreciate and respect you for it. In addition, streamline the number of packaging materials you have. Instead of using layers of thin cardboard boxes and fillers, consider selecting something thicker that will provide greater support and require less space. Overall the goal is to free up space on your pallets, which will eventually free up truck space and in the end reduce costs, fees and time.
Lastly, consider alternatives to ‘traditional’ shipping materials. While boxes are great, crates, bags, packaging materials are great alternatives for saving space or increasing product protection. The better the fit of your shipping materials, the more you will save.

4. Finding the right resources

All too often, logistics is an afterthought. After all, your team has put in hour upon hours of work on your ecommerce site and Omni-channel marketing strategy, shipping is simple and the last aspect to consider within the process. However, package engineering requires a specific skill set and industry experience. Again, it’s a balancing act between product protection and cost.
3PLs act as great resources when it comes to packaging. Due to their in-depth knowledge and experience, they can look at the impact each shipment will have on your supply chain and be able to offer creative alternatives to cut as many costs as possible.
Packaging manufacturers make packages for the sake of making packages. Rarely do they consider how the box or packaging will be used or moved. As a result, your company could pay for this mistake in damages, return fees or additional shipping fees.

5. Prepare for Returns 

According to Kurt Salmon, leader of a global management consulting firm, 1/3 of all purchases are returned. When client’s send their purchases back, rarely do they know how to properly pack and return the product, leading to greater charges in damages, lost items or additional shipping fees. In order to reduce your cost, consider how your customers will return items when designing and selecting packaging. Your materials should be durable enough to be shipped multiple times, have proper shipping instructions and labels, and directions for shipping so your products return the way you expect them to come back to you – ie. Not damaged.