Packaging optimization: how much air do you transport?

When buying transportation, what you’re really buying is space on an airplane, ship or truck. The issue is less about how much your packages weigh and more about how much space they take up. The goal, then, is to design packaging to take up the least amount of space possible.

The better and more efficiency you pack your products by optimizing space and reducing air in each package, the more packages you can stack into a container. It’s not rocket science. Rather, it means taking a holistic view of your supply chain to ensure packaging is coordinated and uniform at each step along the way from manufacturing facilities overseas to distribution centers and retailers in Europe and North America.

Are you shipping air? Three questions to ask:

  • Is the primary packaging “made-to-fit” the product inside?
  • Can you measure empty space between the top of the product and the top of the master outer carton (MOC)?
  • Do you use void fill materials to protect products from shifting inside secondary/tertiary packaging?

Why you should care about air

In an article for Supply Chain Quarterly, authors (including John J. Coyle, Professor Emeritus of Logistics and Supply Chain Management at Pennsylvania State University) analyzed shifts in supply chain strategy driven by high transportation costs. Among the most notable shifts, the authors cited a shift from designing products and packaging for marketability toward designs that incorporate “shipability” considerations—designs that reduce weight and increase shipment density. According to the authors, “Freight costs are reduced because the reduction in package size and weight, as well as the use of fewer packaging materials, allow more goods to be shipped in one truck, container or other conveyance.” The authors also note enhanced revenue through “better utilization of valuable shelf space.” In a case study from UPS, packaging engineers redesigned a customer’s transportation packaging for optimal cube and space utilization inside trailers and containers. In addition to eliminating oversize charges, the new packaging design allowed more packages inside inbound containers (reducing overall annual shipping expenses) and required less warehouse space.

Lighter, smaller packages have been increasingly appearing in retail stores as far back as 2005. According to a survey by the Grocery Manufacturers Association of its members, between 2005 and 2010, packaging improvements implemented by companies in the CPG industry resulted in more than 1.5 billion pounds of packaging avoided. The GMA also reports that manufacturers expect to avoid another 2.5 billion pounds of packaging by 2020. In terms of greenhouse gas emission equivalence, removing four billion pounds of packaging from the waste stream is the same as removing 815,000 vehicles from America’s roads for one year, or avoiding the consumption of 479 million gallons of gasoline.

To quantify the packaging efforts of its members, the GMA enlisted McKinsey & Company and Georgetown Economic Services (GES) to learn about the packaging weight reductions achieved between 2005 and 2010. Respondents to the survey represented approximately $225 billion in annual U.S. sales, or roughly one-third of the U.S. market. Key findings include.

Ship less air, save more money

In addition to reducing your carbon footprint, made-to-fit packaging can also have a significant impact on your bottom line. Some of the savings opportunities presented by better packaging included.

  • Reduce Packaging Spend – “Right-sized” packaging reduces (or eliminates) the need for costly void fill materials, which can lower your packaging spend overall. And depending on how much dead space exists in your current packaging, re-designing to eliminate air may also result in needing fewer boxes (or less packaging material) to ship the same number of products overseas.
  • Reduce Transportation Costs – One of the key benefits of right-sizing is improved volumetric efficiency inside trailers and/or shipping containers. In other words, by eliminating dead space you can effectively ship more products without incurring additional transportation costs. In some cases, optimized packaging may even reduce the number of shipping containers overall.
  • Reduce Product Damage – Eliminating dead space means products are snug and secure. This means that throughout the supply chain, your product has the best possible protection against hazards such as stacking, rough handling and vibrations. A packaging engineer can help you calculate the ROI of right-sized packaging by analyzing your current product damage rate and comparing the potential savings against the cost of a re-designed packaging solution.

Discover the benefits of better packaging

BillerudKorsnäs helps global brands save money and reduce waste by identifying packaging improvement opportunities throughout the value chain. One of the first areas our engineers and designers look at when performing a packaging evaluation is the amount of empty space.

We help our customers save an average of 15% on their transportation costs by optimizing their packaging, increasing the number of packages per container and reducing the overall number of containers transported across the ocean. Discover savings hidden in your supply chain. Contact BillerudKorsnäs to find out how.

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