Parcel Shippers look at New Ways to Control Dimensional Weight

Small Parcel shippers understand the nature of the General Rate Increase, and they attempt to mitigate the increase accordingly.  We, as shippers, understand the dimensional weight logic changes (default 139 now in case you haven’t checked lately) and, ideally, we were preparing for several months to ensure our invoiced costs and negotiated divisors most accurately reflect our actual shipping profile.  Now that the smoke is clearing we are getting a look at who took a financial hit and what alternatives exist to create savings through durability, not just the divisor.  The logic changed—did shipping patterns change?

 

Cube Utilization

When considering dimensional impact, and more so how to offset it, we must first understand cube utilization.  We can go fast and furious and attack the dimensional divisor itself, but few shippers get the divisor waived.  Instead of immediately targeting the surcharge, let’s understand what drives it—and how we can eliminate it outside of the contract.

Cube utilization is the use of space within a container or box—a percentage of total usable space.  The average e-commerce shipper achieves 60-65% cube utilization on outbound boxes.  This means that package has 35-40% of its inner space occupied by fillers or air.  Unfortunately you aren’t paying peanuts to ship those foam peanuts. 

We want to consider the concept of unitizing as we utilize.  Unitizing a shipment or load is taking smaller packages (units) and putting them in a larger package or system to move the shipment easier—the goal being to pack the shipment and use the space in the container efficiently with product.  If a product is not designed correctly shippers then need to adjust packaging to offset poor product design. 

 

Product Durability versus Package Performance

A significant area of review in transportation cost management is packaging optimization.   Shock, vibration, compression—this is what your package is exposed to each time it gets sorted in a hub or station and loaded on the van.  A package traveling a mere couple hundred miles may be loaded and reloaded as frequently as five times between truck, terminal, and hub.  Carriers offer definite delivery times so these packages need to be scanned quickly and moved to the next destination.  Therefore package handlers will sort the packages in a manner the keeps the center of gravity low, so the package is not top heavy and risks falling off the belt, and keeps the label visible at all times. 

Package handlers do not stack one package on top of the next in a column but rather the packages are interlocked.  The goal is to securely move as many packages as quickly as possible.  The concern is compression.  Corrugated box strength, when interlocked in transit instead of column stacked, is reduced by up to 50 percent.  Handlers try to keep the heavier packages on the bottom of the stack, but since packages are stacked and loaded as they are received, smaller less dense packages are subject to supporting the weight of the package wall.

Compression is not exclusive to stacking.  When a sortation belt jams packages can slam into each other and continue to press together until the jam is alleviated or the belt is turned off.  Compressive forces can impact the top and bottom as well as the sides of the package.  Palletized packages are frequent victims of dynamic compression, which is why shippers are encouraged to consult their carrier’s package testing lab to verify the durability and sustainability of the package composition before using it to send merchandise.  As shippers we want to cut dimensional cost by under designing the package.  This makes sense for cost containment—less wasted package space, less billed weight.  But if your product lacks durability, what you save in packaging you spend in replacement freight, fees, and fuel.

If you are at 50 percent of your strength you are also at 50 percent of your support, which now introduces the elements of shock and vibration.  Shock occurs when a package is dropped or rattled by another package.  Packages rarely fall flat; they normally strike an edge or corner or hit the bottom surface of the package when they land.  This impact can cause abrasions to the package surface or tear the packaging entirely, subjecting the contents to damage.  To ensure some level of protection, a two inch buffer should be allowed on each side between the product and the packaging.  Anything greater than two inches introduces package over design. 

As trucks, aircraft, and sortation belts move they create levels of vibration.  Vibration varies from a steady constant hum to several pinpointed sharp jolts.  Packages on a trailer driving cross country are subject to vibration for days.  This constant movement can loosen closures and weaken packaging and shift the package contents, resulting in pressure points on the box, bag, or container.

Two additional packaging hazards to consider are climate and altitude.  Contractor vans are not air conditioned so if it is 100 degrees outside the van it is 100 degrees inside the van.  Likewise if the van is traveling through below zero temperatures the packages are below freezing as well.  Most cargo jets are pressurized, but trucks can hit altitudes over 10,000 feet. 

The challenge for many shippers is knowing what dimensions exist in their warehouses, and what the actual weights of those packages are.  We receive manifests of tracking numbers and associated dimensions, but without knowing actual weight, we will be challenged to adequately quantify the potential cost increase.  Many warehouses do not own or lack the manpower to employ software to capture and store the data.  How are shippers handling the new logic?  They are looking to cubing and weighing systems.

Automated dimensioning systems optimize freight handling by quickly and accurately obtaining package dimensions, storing the shipment data, and allowing shippers to rapidly sort and target problem packages.  We see static systems—collecting data on stationary items and sending the metrics to the warehouse for freight manifesting.  Since packages move so we need a way to review data when the boxes travel on conveyor belts.  As we discussed above, packages fall, stack, and smash so the shape of the package at pick up can drastically change during sortation and delivery.  If the shape changes, the dimensions can change, and now your billed weight can change even if the package just went a mile down the road.  By using in-motion scanning systems shippers can review length, width, and height. 

 

Key Takeaway

Shippers are feeling the dimensional logic pinch, just as we knew they would.  Be mindful that the carriers changed the operational cost of doing business, not just the financial cost.  When a carrier looks at your actual package differently we need to look at the impact of poor design.  We can negotiate a solid dimensional divisor, but if package performance is weakened, so are our expected savings.

Brittany Beecroft is our Director of Parcel at Target Freight Management.  She can be reached at 304.374.4739 or via bbeecroft@targetfmi.com.