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Optimizing Shipping Costs

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A Strategic Move for Business Success

In the ever-evolving landscape of e-commerce, shipping costs stand out as a critical factor influencing a company’s bottom line. Many businesses, albeit unknowingly, are bleeding dollars due to a seemingly innocuous but significant oversight – simply put, shipping in packages that are too big for their products. 

Unfortunately, it’s still a common practice – items loosely fitting in a box larger than required, creating a double whammy of increased shipping expenses and environmental waste.

One prevalent issue we see is the widespread use of standard-sized boxes for a myriad of products, regardless of their actual dimensions. Imagine shipping a small gadget in a box designed for a much larger item. It’s like driving an SUV car when a bicycle would suffice – a waste of resources and money.

A recent personal experience perfectly encapsulates this issue. A shipment of vitamins arrived, and upon opening the package, it became apparent that the retailer had definitely not optimized their packaging. The box was disproportionately large, filled mostly with air. It served as a stark reminder of how prevalent this practice is, even among established retailers.

The advent of custom packaging machines has garnered attention from major players like Amazon and Walmart. These machines revolutionize the packaging process by creating tailor-made boxes for each order. While such technology is a step in the right direction, the real game-changer lies in the holistic approach provided by logistics consultants.

Logistics and supply chain consultants bring a wealth of knowledge to the table. They conduct a Comprehensive Logistics Analysis, delving deep into a company’s shipping practices, identifying areas of improvement, and formulating strategies to optimize costs. One key revelation often involves the art of right-sizing packaging.

The benefits of right-sizing packaging are manifold. First and foremost, it can drastically slash shipping costs. By using appropriately sized boxes, companies can significantly reduce the dimensional weight and, subsequently, the expenses associated with shipping and at the same time reduces claims for damage in transit. This directly translates to a boost in the company’s profitability.

Additionally, right-sizing packaging contributes to sustainability efforts. It minimizes material waste and reduces the carbon footprint associated with transportation. As consumers increasingly prioritize eco-friendly practices, businesses that align with these values gain a competitive edge.

In conclusion, the shift towards right-sizing packaging is not just a trend; it’s a strategic imperative for businesses aiming to thrive in the competitive world of e-commerce. Embracing the expertise of logistics and supply chain consultants is the key to unlocking substantial savings and ensuring sustainable shipping practices. As technology evolves and custom packaging becomes more commonplace, the guidance of a seasoned logistics consultant remains invaluable – a beacon illuminating the path to efficiency, cost-effectiveness, and long-term success.

Have questions about Right-Sizing? Reach out to us today.  Our supply chain experts are always ready to help.

Walmart storefront

Is it Follow the Leader or Lead the Follower?

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Last week, Amazon announced it is working on plans to fundamentally change its Prime Two-Day shipping program into a One-Day shipping program.  For years now Amazon has been continually building and strengthening its fulfillment and logistics networks for precisely this reason.

Now today we have learned, (and not to be outdone), Wal-Mart is also moving in the same direction by offering Free One Day shipping on as many as 220,000 different items when Wal-Mart shoppers spend a minimum of $35.00.  Wal-Mart will be initially testing this new speedy delivery concept in Arizona and Nevada and then plan to roll it out into Southern California. From there it will obviously continue to grow in major areas of consumption.

Both companies have obviously been listening to their customers who are apparently obsessed with the need for faster and faster delivery.  Amazon believes it is so important to move in this direction that it has committed over $800 Million to make sure this works. Wal-Mart on the other hand believes it will actually save money because the items they plan to ship in this program will come in just one box.  Additionally the goods will come from a single warehouse that’s closest to Wal-Mart’s customers.

Interestingly, as both companies try to outdo one another, Wal-Mart’s e-commerce business currently is not profitable.  Wal-Mart is forecasting that it will lose even more money in 2019 than it actually lost in 2018. Can they really make up those loses by increasing volumes and expediting delivery times?  Apparently Wal-Mart thinks so.

Another contrasting factor is that Amazon’s Prime customers pay an annual fee currently pegged at $119, while Wal-Mart’s service will be available to most of its customers without any additional charges.  That is a huge difference in available funds to help make these programs financially successful.

Where all this ends up remains to be seen.  But one thing is for sure, we believe this is just the beginning of what will be an ongoing race between these two retail titans, as well as others who will be forced to join the game, for growth in on-line market share.  Each one committed to disrupting the disruptor. Hang on folks, more change is coming.