The increase in e-commerce home deliveries, combined with the advent of dimensional (or DIM) pricing in 2015 on some carrier ground deliveries, has translated to increased shipping costs associated with order fulfillment. As e-commerce continues to fuel the growth in small item home deliveries, last-mile carriers were quick to adopt this volumetric pricing strategy. To keep shipping costs low and ensure that web shoppers kept clicking the Submit Order button, retailers have since began the transition from traditional, corrugated cartons (boxes) to alternative shipping containers such as bubble mailers and polybags. In our most recent On The Move Webinar, “Goodbye cartons, hello polybags,” I explored the impacts this packaging shift has had on fulfillment strategies.
I kicked off the Webinar with a brief explanation of DIM pricing, including specific examples of how larger, yet lighter items are more expensive to ship than heavier, smaller products. I then shared two key statistics that demonstrated the impacts of this pricing change:
- 33 percent of all ground shipments are affected by DIM pricing
- Shipping costs increased 42 percent in 2015 compared to 2014
The first live Webinar poll question confirmed that 50 percent of attendees have already made changes to their organization to address the DIM pricing change. The second question revealed that 61 percent of attendees have already incorporated polybags into their packaging mix, with cartons still the most common packaging option at 93 percent. Clearly, there will always be a place for traditional packaging, but the pliable nature of polybags makes them ideal for irregular-shaped items or softer apparel-type products. But the rule of thumb with packaging is: the more pliable the packaging, the lower the DIM weight and shipping costs. Conversely, the more pliable the packaging, the more challenges it presents to the automated material handling system.
The remainder of the Webinar discussed the many ways retailers can lower shipping weights. Note that the first four items on this list precede addressing actual conveyance/sortation strategies:
- Re-negotiate with carriers
- Utilize on-demand packaging solutions via machines that create cartons based on order profile
- Install cartonization software that tells packers the optimal size package to use
- Deploy rate shopping software that selects the optimal carrier based on size, weight, destination and negotiated rates
- Perform pre-sortation at the fulfillment center to skip shipping zones and dramatically cut costs
- Reduce packaging sizes either with new systems designed to accommodate polybag flow from pack-out operations to shipping or by investigating opportunities to handle polybags with existing equipment
The two primary methods for incorporating polybags into fulfillment centers are singulated and bulk flow systems. I discussed the pros and cons of each method and explained that the bulk flow system eventually requires automated or manual singulation prior to final sortation in the fulfillment center.
I then explained some of the challenges associated with conveying polybags through the DC, including: the potential for extra catch points; the difficulty conveyor cameras have detecting the leading and trailing edges of an item; and the challenge of barcode identification due to package irregularities.
Finally, I addressed the variety of conveyor and sortation equipment types and their ability to handle these pliable polybags. There are a multitude of factors to consider and as many equipment options to evaluate, from rollers and belt zones to diverters and sweep sorters. With so many considerations, it’s vitally important for retailers to consult with an experienced material handling solution provider. To learn how you can integrate polybags into your DC operations, please visit our archives to view this Webinar in its entirety or speak to an Intelligrated material handling expert.