This Month in Modern: Join the “packaging revolution”... or get ready to pay

A wise supply chain consultant told me more than five years ago that “packaging was the final frontier of supply chain optimization.”

He proclaimed that we’ve focused—and rightly so—on the software, hardware, warehouse/DC automation and high-level transportation strategy that moves boxes more efficiently from Point A to Point B, but we’ve yet to apply those same tools and thinking to the packaging and boxes inside these optimized systems.

Well, quite a bit has changed since that conversation. The continued double-digit growth of e-commerce has rightly turned the spotlight on packaging processes and technologies as an increasingly fickle customer base has forced the hand of fulfillment operations to pick single-line, single-piece orders and ship smaller, more frequent deliveries next day and even same day.

A key element pushing the smarter packaging revolution is that the increased frequency, smaller size and lighter weight of these boxes has not escaped the eyes of parcel and LTL carriers. There’s little doubt that carriers will continue to work on recalculating shipping charges based on the dimensions of the parcel, not just the weight, in an effort to take all the “air” out of their trucks.

All you need to do is read the most recent wave of increase announcements from UPS and FedEx to get a sense for how urgent your participation in the packaging revolution needs to be. In fact, Rob Martinez, president and CEO of parcel consultancy Shipware Systems, referred to one change about to be rolled out by FedEx as “striking.”

“Prior to 2011, the dimensional devisor was 194,” says Martinez. “Today, it’s 166, and effective January 2, 2017, it will be reduced to 139, which is the current divisor for international export and import shipments. In short, the shift for many parcel shippers is cataclysmic, and it will be paralyzing for those not under a dimensional weight custom contract.”

As Modern and sister publication Logistics Management have been covering over the last two years, operations can either sit back, ship inefficient boxes and pay more, or take action with their packaging engineers and carriers for quicker, more cost-effective operations.

To raise awareness and beat the revolution drum, Modern offers our 4th Annual Packaging issue—a field guide you can take with you when you attend PMMI’s Pack Expo (Nov. 6-9) that’s taking place at Chicago’s McCormick Place.

As part of this special issue, Modern’s staff has put context around our “2016 Pallet Usage & Trending Report Study” (p. 36); offers the latest developments on totes and containers and insight into the growing role they play in a more flexible supply chain (p. 42); and gives you a snapshot of some of the hottest packaging products and technologies you’ll see at this year’s Pack Expo (p. 64).

One of the more important articles to digest this month is senior editor Josh Bond’s snapshot of the current state dimensional hardware and software solutions (p. 46). As Bond contends, dimensional information must now be considered from product design through delivery.
“The original case for dimensional systems was to optimize storage space,” says Bond. “Now with dim pricing, having a firm grasp on dimensional data will not only help you better understand what you’re shipping, but it’s useful for your carriers as they manage their assets and costs.”