You may remember a few months back that H&R Block wanted to help all us Tax Payers get our Billion dollars back from mistakes made by doing our own federal tax returns. Well, that got me thinking about all the money that will be left on the table by companies and individuals that will keep making the same mistakes they have been making come January 1, 2015 as it pertains to shipping single parcel.
For those of you that have not heard, UPS & FedEx will both be applying dimensional weight to all ground shipments, not just those over 3 cubic feet and air shipments. So what does that mean to you? Bloomberg and others estimate that the cost to the industry will be $350 million or more. When you head out to the shipping department at your company, if you see anything that resembles the picture collage below, there is a good chance your company will be one of the ones effected with this multi-million dollar cost increase.
|If your company has a single parcel shipping area like this, you probably are at risk!|
Traditionally, companies have erred on the side of operation efficiency and reducing the number of boxes to inventory for their single parcel fulfillment packing lines. That strategy will prove to be quite costly going forward. Currently you would be often sacrificing a few pennies of corrugated box costs to make things go fast and easy, now those decisions will add up to dollars in a hurry with dimensional freight charges. Not to mention the dissatisfied and irritated customers that are tired of receiving over sized boxes with little product and lots of air pillows.
If you want to run some scenarios on your own shipments, feel free to use our free dimensional weight calculator from a previous blog entry.
That being said, this doesn't have to be all doom and gloom, there is a way out or to at least minimize this cost increase. It all starts with right sizing and/or optimizing your packaging and over packaging strategies for single parcel and e-commerce shipments.
Not sure how to do that, feel free to reach out to our Packaging Consultants at Chainalytics - Packaging@Chainalytics.com
We can help you reduce your shipping costs and at the same time reduce your sustainability foot print.