Packaging: The final frontier of supply chain optimization?

Packaging is ready for its close up. Once locked neatly into its own silo, the continued momentum of e-commerce has turned the spotlight on packing processes and technologies as an increasingly fickle customer-base—both retail and B2B—has forced the hand of fulfillment operations to pick single-line, single-piece orders and ship smaller, more frequent deliveries.

That monumental e-commerce growth, along with the increased frequency, smaller size, and lighter weight of these boxes, has not escaped the eyes of parcel and LTL carriers. In fact, carriers are busy recalculating shipping charges based on the dimensions of the parcel, not just the weight, in an effort to take the “air” out of the truck.

In terms of what this means for freight rate increases to U.S. retailers, I’ve heard estimates of anywhere from $500 million to in excess of $1 billion. Whatever that number ends up being, dimensional weight (dim weight) pricing is coming, and your packing processes need to be front and center in discussions across your supply chain management team if you plan to mange this inevitable cost increase.

To help further your understanding, Modern offers our 2014 Packaging Issue, a primer to take along to Pack Expo International in Chicago (Nov 2-5). PMMI, the show organizer, tells us that they expect more than 50,000 attendees this year, so there’s a good chance you’re reading this issue at the show in search of solutions.

Associate editor Josh Bond explores how distribution professionals and equipment providers have been preparing to manage dim weight, a sea change that transportation analysts say is responsible for pushing packaging out of the shadows. “If there was any doubt that traditional approaches are outgunned, it’s now abundantly clear that the fundamentals of materials handling are being rewritten,” says Bond. “That said, dim rates are not entirely a surprise, and have already fueled a wave of innovation that shows that the industry is ready to meet the challenge.”

Editor at large Sara Pearson Specter gives us a look at how print-and-apply technology is keeping up with e-commerce. “Retail shippers can no longer afford to rely on manual parcel packing stations,” says Specter. “Instead of shipping 12,000 items in 1,000 cartons, we’re now sending 12,000 individual packages with one item. This is simply going to overwhelm traditional pack station operators.”

Editor at large Roberto Michel offers highlights from Modern’s 2014 Pallet Usage Survey, the most comprehensive look at how readers are managing this fundamental, yet critical element of their supply chain. “While price remains the top driver of usage, the needle is moving on other influencing factors and use trends such as customer compliance, the need for better tracking due to e-commerce, and an increase in pooling,” he says.

And to get a glimpse of what you can expect to see at the show, we offer a Pack Expo Product Preview featuring technology and equipment designed to reduce costs, increase productivity, and modernize now mission-critical packaging lines.
It’s been said that packaging is the next—and perhaps the last—frontier in supply chain optimization. It’s now clear that this once disconnected element now needs to be plugged into to your greater supply chain planning before your operations are left in the dust.