2015 Pack Expo Las Vegas Recap

by Rich Lindgren, CPP
Chainalytics

Recently Chainalytics' packaging engineering team attended the PACK EXPO trade show in Las Vegas.  This year's show featured more than 1,800 exhibitors and 30,000+ attendees. Our team of packaging consultants canvased the floor for the better part of three days to find all things new and cutting edge in packaging industry.

While I've attend several Pack Expo shows in Chicago, this was actually my first year attending the packaging industry’s west coast version.  General impressions on Las Vegas vs. Chicago are the following:

1. Still a huge show, but much more manageable then Chicago, you can cover in 2 full days without sprinting the aisles.
2. Vegas is definitely a little less equipment and machinery intensive.  You get a better mix of materials, new technologies and material handling supplies.  So if Chicago turned you off in the past because of being overwhelmed with giants exhibits of fillers, wrappers, and conveyors, give Las Vegas a try.
3.  In my opinion, September in Las Vegas is so much nicer weather wise then the Windy City in October or November!


Lastly I leave you with our three top finds from this year's expo:

1. CogitoCan - One of the few short comings of the long-standing aluminum can is the lack of resealability.  Seeing the CogitoCan at the show was very unique and an exciting proposition for the beverage markets, especially if it as cost effective as they claim it to be.

New Resealable Aluminum Can Technology

2.  Easy Fold Fixtures - In our line of work as packaging consultants, we see tons of labor and time spent folding up two sided rollover corrugated cartons, a.k.a. Pizza Boxes.  Walking down one of the last aisles of the show for me, this immediately caught my attention.  Based on a few minutes in the booth, this seems like a great and affordable way to reduce labor and repetitive motion injuries as well asimprove productivity and tact time for many companies.  To see how it works, check out this 20 second video.

EZ fold fixtures

3.  WestRock Meta E - The newly formed WestRock had very large and impressive exhibit showing off their newest auto case and tray erecting Meta series.  For me the coolest offering they had was their Meta E which is focused on the E-commerce sector.  They have a unique system that auto erects an RSC corrugated case that is lined with cohesive paper.  You load the box upside down and place your product inside the top sealed lid of the case.  An operator then folds over the cohesive paper onto itself that creates a false bottom of sorts that cradles the product and holds firm to top of box.  When the consumer receives their shipment and opens the top, the product is justified to the top and creates a clean out of box experience with no loose fill, air pillows or shipping dunnage.  While this technology does nothing to solve for shipping air or reducing dimensional weight, it does potential reduce labor and packaging materials used.

Example of the customer "Out of Box Experience" with Meta E

Hopefully you have found this info helpful and you feel inspired to check out a future Pack Expo show.  If you have questions about something you want to know more about or something you found at Pack Expo, leave a comment below!

What’s New with Dimensional Weight?

by Rich Lindgren, CPP
Chainalytics

We are about half way into 2015 and the new Dimensional Weight pricing model issued by UPS and FedEx earlier this year. Fortunately, many shippers and 3PLs have been able to avoid the price increases taking immediate effect thanks to negotiation or multi-year contracts that haven't yet expired.  

(If dimension weight charge is news to you, check back on this previous blog entry.)

Rumblings and rumors from the packaging and supply chain industries suggest that the carriers are forming contractual partnerships with companies like Pack Size not only to secure business for each other, but ultimately appear to relieve the sting felt by shippers with the price increase. Naturally, the details of these dealings have been kept hush-hush. 

There would have to be a pretty compelling financial savings for a company to lock into long term exclusivity for both packaging and single parcel carrier arrangements. In my opinion,  if you already have a relationship with one or the other, why would you want to bring another company into the mix? Sounds messy. 

How much air are you shipping from you distribution centers?

If your company was not so fortunate at the negotiation table, and your plan A was to wait and see if the changes affected your ground pricing, now would be a good time to start reviewing your FedEx and UPS invoices against past quarters to see what the ultimate cost impact has been to your business and profit margins. Chances are after seeing the delta you will have to go to Plan B, and try and salvage some money to not blow this year's budget.  

Admittedly, sometimes Plan B's can be better than Plan A's in the long run. An exceptional Plan B in my opinion is to redesign the packaging for your high volume products, or implement a simple box sizing optimization exercise for your distribution centers.

Shipping air is almost like using dollar bills as void fill!

Either way, with dim weights in the mix, there is a lot of jockeying for market share by both carriers or packaging suppliers in the parcel game as "grace periods" expire for companies currently phasing in the dim weight pricing changes immediately. And frankly, there's a lot of money to be made (or lost) depending on the packing strategy you take. It's important to be aware of this the next time your contracts are up. Go line by line and review them carefully.

Blog: A Look back at 2014 Packaging Predictions

By: Rob Kaszubowski

The turn of the New Year means a few things: goals, resolutions and planning for the year ahead; and reflections and evaluation on the year that was. Early in 2014 I made a few predictions on packaging trendsfor the year.  Let’s take a look at how those predictions shook out over the course of the year:

1)      Cartonization: While I can’t say the term “cartonization” specifically took off last year, the general theme sure did. We had defined cartonization as the process or tool used to select the best shipper case to transport products. The general idea behind the concept is to have an optimized selection of shipping cases to transport a wide variety or mix of products. FedEx and UPS definitely had the same concept in mind as they looked to optimize the cube utilization within their trailers and delivery trucks when they changed their pricing structure from straight weight to dimensional weight starting January 1, 2015. 

2)      Slack Fill Packaging: As most consumers are painfully aware, slack fill is evident in many of the food and consumer goods products we purchase. However, it’s the non-functional slack fill that will get you in trouble with the attorney general – specifically the empty space in a package that is filled to substantially less than its capacity.  Slack fill started to make more of a splash late in the year when multi-national consumer goods companies Unilever and P&G  and pharmacy chain CVS  were all hit with hefty fines for using oversized packaging that deceived consumers to think they were getting more product than was actually inside the package they purchased.

Big package for small product? This illustration shows the fill line for a popular CVS drug store product.

Courtesy ConsumerWorld.org

3)      Harmonization: Once again, this appears to be a practice that hasn’t quite taken off – at least publically. The theme around harmonization revolves around standardizing and consolidating packaging – where applicable – to increase volumes and leverage buying power. There is often a fine line between standardizing and customizing, as each comes with its own pros and cons. While harmonization wasn’t a headlining theme, it is still a good analysis to perform as companies turn over all the stones searching for packaging cost savings opportunities.

4)      Shelf Space Optimization: This is also a term as consumers you may not hear broadcast from the mountaintops – and that’s just the point! CPG’s are constantly looking for ways to make changes that are visually indifferent to the naked eye, yet allow them to fit one extra box of crackers on the shelf – and also improve their transportation cube efficiencies. Take a look at a few of the changes in packaging sizes that weren’t able to slip past consumers’ attention: http://consumerist.com/tag/grocery-shrink-ray-2

a.       Also a good link: http://www.bostonglobe.com/lifestyle/food-dining/2014/02/11/the-incredible-shrinking-package/Ti6VwQCCcg0whLdr8bHnyJ/story.html

Many packages are shrinking on shelf, is it just the package or sometimes the product too...

5)      Plant-Based Packaging: Last year we lauded companies like Dell and Coca-Cola for leading the charge on sustainable, plant-based packaging. As with any new material or technology there can often be a reluctance for larger companies to take the plunge and put forth the resources required to execute a potentially risky endeavor. However, late in 2014, TetraPak announced the launch of its first package madefrom plant based materials. As the technology behind the materials and manufacturing becomes more sophisticated and increased volumes drive down the price I’m sure we’ll here more stories of other CPG’s launching new plant-based packaging.

So I didn't exactly knock it out of the park in 2014, but then again that’s why they call them predictions. Besides, if I was awesome at predictions I would have made some great stock picks, cashed out and would be sitting on a beach in Cancun! 

Get Your Millions Back!

by Rich Lindgren, CPP
Chainalytics


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!

H&R Block estimates that there about 11 million returns divvying up that Billion, which only comes out to around $460 per incorrect return, which is nice for an individual, but for a company, that is pocket change for most.  When it comes to single parcel charges, there are more like a few thousand companies that will burden the brunt of this $350 million dollar industry hit. For some companies, this will cost them hundreds of thousands of dollars if they don't do something about it.  Regardless, it's your money, Chainalytics wants you to get it back!

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.

This example of office supplies of a box that dimensions 14"x10"x5" that weighed 1lb will now bill out  at 5lbs under new rules.  Likely cost impact on this shipment is 50 cents or more, times hundreds of shipments like this every day and you have a big problem!

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.