Smarter Packaging Can Help Minimize Shipping Charges

As many retailers are painfully aware, dimensional weight pricing is now in effect for U.S. ground shipments.  The new pricing strategy was implemented during 2015 by most leading carriers, with many smaller carriers following suit.  The impact?  Shipping costs, especially for e-commerce retailers, have increased by as much as 30 percent.

Dimensional weight pricing assesses charges based on the amount of space a package takes up on a truck, rather than simply on its weight.  While the pricing strategy has long been in effect for air shipments, the practice was extended to ground shipments largely as a result of the surge in e-commerce shipments.

As Logistics Management notes, the surge in online shopping has flooded carriers with small packages, with a “typical” package including as much as 40 percent air and filler.  “While many trailers can haul over 45,000 pounds,” the article states, “small package carriers are struggling to reach 25,000 pounds in a trailer.”

With traditional weight-based pricing in effect, there is no incentive for a shipper to exercise caution in the packing process.  A warehouse worker simply grabs a box, regardless of its size, places the order inside, and uses filler – Styrofoam peanuts, air pillows, newspaper – to fill any empty spaces.  The result is often an oversized package that takes up an inordinate amount of space, but for which a carrier could only charge based on its weight.  “Whether a driver is hauling a super heavy piece of machinery or a feather-light box filled with rolls of paper towels bought in bulk, carrier costs including driver wages and fuel remain the same,” a CNBC report noted.

Dimensional weight pricing seeks to rectify the situation in two ways:  (1) Shippers are incentivized to avoid higher costs by implementing packing efficiencies; and (2) Carriers are not “penalized” for shippers’ inattention to packaging details.  Stories abound of consumers whose small-item purchases arrive in boxes several times larger than necessary, that are chock full of padding and filler.  It’s frustrating for the consumer, and costly for the trucking firm.

There are ways, however, for a shipper to mitigate the impact of dimensional weight pricing.  A new white paper from Purolator International, “Managing Shipping Costs – Packaging Efficiency,” offers a detailed overview of options shippers can use to help minimize costs.

From reassessing packaging processes to negotiating size allowances with carriers, shippers do have opportunities to manage costs.   As the paper describes, one leading retailer achieved more than a million dollars in savings by making slight modifications to its packaging sizes.

Learn more about managing the impact of dimensional weight pricing by clicking here to download a copy of Purolator International’s new white paper.