It is too expensive to provide a custom box for each order. That’s why businesses have to choose the optimal amount of box types to match their item and order profile.
However, businesses base their box assortment decisions on rules of thumb or basic analytics. That’s why due to a lack of data-driven decisions, businesses are buying box types that don’t fit their order profile and transport rates.
Choosing the right shipping box types can help you streamline the shipping process and save on shipping costs.
Selecting the right shipping boxes can be a complex process, with numerous factors to consider:
- How many box types to buy?
- What dimensions to choose from?
- Which boxes fit the item and order profile?
- How to align the box assortment with transport rates?
These are just some of the questions that need to be answered when deciding which shipping boxes to purchase.
In this article, we will explore these questions in more detail, providing guidance on the complexities and ways how to select the best shipping boxes for your order and item profile.
Complexity
The complexity of buying different box dimensions can make the shipping process challenging and time-consuming. It involves factors such as:
- Transport rates
- Box types
- Order 3D composition
- Parameters
Transport rates
Understanding complex transport rates can be challenging, with factors such as tier and zone-based rates, as well as various surcharges including zone, weight, and volumetric surcharges.
Tier-based rates refer to shipping rates that are determined based on the total (volumetric) weight of your shipment. Typically, the heavier your shipment, the lower the per-pound shipping cost.
However, there are often multiple tiers with different rates, so it's important to understand which tier your shipment falls into to ensure you're getting the best possible rate for your shipment.
Zone-based rates refer to shipping rates that are based on the distance between your shipping location and the destination.
Carriers also often charge various surcharges for different factors.
For example, zone surcharges apply to shipments that originate or are destined for specific areas, such as remote or residential areas.
Weight surcharges apply to shipments that are heavier than the carrier's maximum weight limit, while volumetric charges are designed to account for the fact that large, bulky packages take up more space on a delivery vehicle and require more resources to transport, even if they are relatively light in weight.
By aligning your box assortment with transport rates, you can minimize dimensional weight and optimize your fill rate, which can ultimately lead to lower shipping costs.
Box types
Based on our research and customer cases, cardboard costs are heavily related to box assortment decisions.
Packaging buyers in the company have the incentive to decrease the number of box types (higher demand per box type), which leads them to higher volume discounts, and cheaper overall cardboard spending. Our advice is to tackle box assortment decisions from a holistic Total Cost of Ownership (TCO) perspective.
Order 3D composition
Large data sets containing information about customer orders, product dimensions and weights, and shipping costs can help companies optimize their box assortment by analyzing this data.
This information can then be used to select the most cost-effective box sizes for different products and shipping destinations.
Another factor that impacts box assortment is seasonality, as some products may be more popular during certain times of the year. By anticipating these seasonal shifts in product demand, companies can adjust their box assortment to ensure that they have the right box sizes on hand to accommodate these items.
Item evolution within a warehouse can also impact box assortment. As new products are introduced and older products are phased out, companies may need to adjust their box assortment to accommodate these changes.
Parameters
Box parameters such as stackability, carton thickness, and rotation can affect box assortment for a company in several ways.
Increasing the number of shipping box types that a company purchases, increases the fill rate and decreases the amount of air packed inside. However, in return, this would also result in increased cardboard spending, which many companies try to avoid.
Stackability is another consideration for shipping box selection as it affects both warehouse and transport efficiency. The ability of boxes to be stacked on top of each other (Ti-Hi), depends on box dimensions, weight, and durability.
Efficient stackability saves costs and improves warehouse efficiency while also reducing transportation costs by transporting more products in a single trip.
The thickness of a carton protects products during shipping. Fragile items may require thicker cartons to prevent damage, while lighter items may not require as much protection.
Additionally, the mode of transportation and distance of the shipment can also impact the necessary carton thickness. By selecting the right carton thickness, businesses can help ensure that their products arrive at their destination in good condition.
Solutions
A solution that many companies are opting for is box assortment optimization.
Calculate the optimal shipping box sizes and dimensions to maximize your supply chain efficiency and minimize costs.
Box assortment optimization works by analyzing the order history’s data and determining the optimal size and type of boxes for the item and order profile. Optioryx utilizes AI-powered 3D algorithms to generate the best possible results by considering the order profile, transport rate structure, stacking parameters, and analyzing different box types.
The optimization criteria for the solution involve maximizing fill-rate, minimizing transport cost, or a combination of both.
Many companies are making box assortment decisions using either rough guidelines or simple analysis. As a result, they are purchasing box types that are not suitable for their order profile or transportation rates.
This approach to box assortment decisions can have a significant impact on the Total Cost of Ownership (TCO) of packaging.
Benefits of Having The Right Shipping Boxes
Buying a smaller number of shipping box types may provide benefits such as quantity discounts and operational ease, but it comes at the cost of higher cardboard spend.
That’s why you need to find the balance between the right number of shipping box types.
Conclusion
Selecting the right shipping boxes is crucial for your TCO, as it can streamline the packaging process and reduce costs. By using box assortment optimizers, you can calculate the optimal box dimensions to maximize supply chain efficiency and minimize costs.
There are massive gains to be achieved when aligning your box assortment (box types) with the carrier rates and surcharges.
Optioryx combines the strength of cost-effective 3D cartonization and box assortment optimization. We pack in accordance with your carrier contracts while shipping the least amount of air possible.
