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Packaging having a negative impact on your transportation costs?
In our haste to hit our annual productivity goals we inevitably take the fastest and least resistant approach….Mr. Carrier - Cut that rate! While I subscribe to competitive rates that pay a carrier a fair rate of return, often the bigger savings can be found in how your product is being packaged for transport and subsequently stored by DCs and customers.
In a presentation last fall at CSCMP Jack Ampuja Executive Director – Niagara University Center for Supply Chain Excellence spoke on the impact of packaging design on supply chain cost. He gave some excellent examples on box design which illustrated how poor package design negatively impacted its cost to produce, cube size, and in-transit damage.
From a transportation perspective package design, cube and in transit damage are major cost elements for Air, Parcel, LTL and Truckload transportation; and handling efficiency and storage cube/height utilization certainly impacts warehouse distribution costs. Quite often certain package designs force us to use more expensive modes of transportation and to pay assessorial charges. Take a product that could easily be shipped in a dry van but has to tarped and placed on a flatbed for shipment because the packaging is untreated corrugated that is negatively impacted by weather while in transit. Generally the cost of a dry van is less than a flatbed and there is also no need for a tarping accessorial. A different packaging material or facing might at least allow the product to be shipped without tarping. If you can accomplish both….all the better.
LTL and parcel is all about the perfect package – perfect surface and height on a perfectly sized pallet, great stack ability, product density, maximum cube utilization, and no damage. Tired of battling with LTL carriers about your classification …Look at your packaging or better yet, ask your carrier if they have a packaging engineer who can help you take cost out and improve customer service.
Sometimes, you just have to spend a little time looking at the root causes of why our supply chain costs are high. The rewards are high and often, quite often, customers like the change as well.
Packaging having a negative impact on your transportation costs?
February 5, 2008
In our haste to hit our annual productivity goals we inevitably take the fastest and least resistant approach….Mr. Carrier - Cut that rate! While I subscribe to competitive rates that pay a carrier a fair rate of return, often the bigger savings can be found in how your product is being packaged for transport and subsequently stored by DCs and customers.In a presentation last fall at CSCMP Jack Ampuja Executive Director – Niagara University Center for Supply Chain Excellence spoke on the impact of packaging design on supply chain cost. He gave some excellent examples on box design which illustrated how poor package design negatively impacted its cost to produce, cube size, and in-transit damage.
From a transportation perspective package design, cube and in transit damage are major cost elements for Air, Parcel, LTL and Truckload transportation; and handling efficiency and storage cube/height utilization certainly impacts warehouse distribution costs. Quite often certain package designs force us to use more expensive modes of transportation and to pay assessorial charges. Take a product that could easily be shipped in a dry van but has to tarped and placed on a flatbed for shipment because the packaging is untreated corrugated that is negatively impacted by weather while in transit. Generally the cost of a dry van is less than a flatbed and there is also no need for a tarping accessorial. A different packaging material or facing might at least allow the product to be shipped without tarping. If you can accomplish both….all the better.
LTL and parcel is all about the perfect package – perfect surface and height on a perfectly sized pallet, great stack ability, product density, maximum cube utilization, and no damage. Tired of battling with LTL carriers about your classification …Look at your packaging or better yet, ask your carrier if they have a packaging engineer who can help you take cost out and improve customer service.
Sometimes, you just have to spend a little time looking at the root causes of why our supply chain costs are high. The rewards are high and often, quite often, customers like the change as well.
Posted by John A. Gentle on February 5, 2008 | Comments (0)
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