Carriers Are Changing Shipping Rates, Here’s Why Automated Packaging Protects Your Operations
A host of packaging costs and surcharges are headed your way. Now is the time to prepare.
There are a host of reasons why automated packaging makes sense for all companies, not just the big operators like Amazon or Walmart. Yet many companies shy away from investing in the equipment needed to automate or semi-automate packaging. If that sounds like your operation, it’s time to reconsider the business case for automated packaging.
Any sized company can benefit from automated packaging, especially as more rules and regulations come down the pike. But even without those changes, automated packaging and rightsizing are good for business.
When you right-size your packaging, you are reducing waste, both in your facility and in the packaging that meets the consumer. If you’re an ecommerce or omnichannel business, this is critical today, especially with the younger generations. Survey after survey reveals that Gen Z is serious about sustainability when it comes to their ecommerce orders. 73 % of Gen Z say they are willing to pay more for sustainable products. It pays for you to right size your packaging and gain their loyalty.
“ . . . 62% of Gen Z shoppers prefer to buy from sustainable brands, and a staggering 73% are willing to pay more for sustainable products. . . . ”
Automated packaging that delivers right-sized boxes and containers also reduces your cost. Carriers will charge more for higher weights, so reducing the weight through less packing materials can go a long way to lower costs.
Beyond wanting less packaging materials, consumers want their packages to arrive undamaged. When you use automated packaging, you’re much more likely to provide them with products that haven’t been damaged by denting or crushing. This again drives consumer loyalty, well worth the automated packaging investment.
One of the most pressing arguments for automated packaging, however, are the changes coming your way from your carriers. Beginning in early January, carriers will start shifting a greater onus on their shipping partners about packaging. These rule changes stem from increasing competition in the carrier world.
It used to be that carriers passed along rate increases to customers on an annual basis. While that is still the case, now they are also making rule changes mid-season, a pattern that began in the past couple of years. For instance, last August, most carriers updated their rounding rules for dimensional weight, well in advance of peak season deliveries.
Thanks to omnichannel, carrier volume is generally decreasing, there are more players in the market, and operating in the positive is becoming tougher every day for the various carriers. The result is that carriers need to find ways to pass on costs to shipper. They’re doing this with new costs and surcharges.
The newest cost to expect is new handling surcharge criteria. In the past, shippers could expect additional charges to packages over 50 lbs. or with a girth of more than 105 inches. But now they are adding in total cubic volume over 10,368 inches. Any packages reaching that size will receive an automatic handling fee. For any shippers who send out medium or large-sized packaging, that can hit hard.
To mitigate some of the new charges coming your way, you need to identify your risk or exposure. Look at the bill summaries you have and identify if you are at risk. Likely every shipper is to some degree, but it’s important to see how much exposure to those increases you are facing. Take in three months of data to see your risk, and combine that with your labor and materials costs, and you can get a good idea of how exposed you may be to the new surcharges.
Depending on your risks and exposure levels, you may reap the benefits from automated packaging in as little as a year, sometimes even quicker. Perhaps most importantly, you’re investing in your operations’ future. Costs from carriers will only likely continue to rise, as they look for new ways to pass along their expenses to shipping customers. Regulations are also an ever-evolving landscape, and Europe continues to lay the groundwork in this regard. All indications are that some of the common regulations surrounding packaging will migrate from overseas to the United States before long. By investing in automated packaging now, you are ready for tomorrow.
Automated packaging and rightsizing leads to more sustainable solutions that make sense for your customers, the environment, and your bottom line. The investment in automated packaging can feel overwhelming at first, but as rates continue to change and charges get higher, the time to invest for the future is today! Reach out to an automated packaging partner for the best solution for your individual operations.
To learn more about MHI’s SLAM industry group: www.mhi.org/slam
More information about Scanning, Labeling, Applying, Manifesting:
5 Major Reasons Companies are Automating Their SLAM Lines
The Business Case for SLAM Automation
Maintaining Your SLAM Equipment
Change Management on the SLAM Line
Monitoring Sensors on the SLAM Line for Trouble
SLAM Solutions in the Pharmaceutical Industry
