Auto-boxing Reduces Packaging Volume, Labor and Corrugate Use
Packaging is a critical component of the e-commerce sector, which saw $602 billion in revenue in 2019, up 14% over 2018. But too often, e-commerce companies ship products in boxes that are much too large for their contents. Not only is this a waste of storage space, packaging materials, and shipping fees, but it also has a detrimental impact on the environment.
Conversely, many warehouses and DCs overstuff flat-pack envelopes. Ultimately, both scenarios prove inefficient—and detract from the customer experience.
What is known as unboxing (individuals recording the opening of a package) is now ubiquitous on YouTube. According to Google, the total amount of time individuals have spent viewing unboxing videos is the equivalent of watching The Matrix more than 20 million times.
The bottom line here is that packaging quality directly impacts customer experience—and social media acts as a megaphone when customers are dissatisfied.
What’s more, shippers face other packaging-related challenges, such as labor market shortages and inefficient material handling processes.
Automated Packaging Solutions to Increase ROI
Fortunately, e-commerce businesses can reduce costs, increase efficiencies, and lessen their environmental impact by implementing auto-boxing.
Warehouses and DCs essentially have three automated or semi-automated packaging options:
1. One Dimensional (1D)
A one-dimensional (1D) solution changes box height only, requiring a greater total number of box sizes.
2. Three Dimensional (3D) Manual
A 3D manual system will custom size each box, so it can reduce dimensional weight charges—but is not likely to increase throughput or reduce labor.
3. Three Dimensional (3D) Automated
A 3D automated approach is preferable for managing higher shipment volumes. 3D automated systems auto-box each single- or multi-item order, creating customized fit-to-size boxes every time.
In addition, this sizing customization makes each package more environmentally friendly, which translates into a greener operation overall.
Fit-to-size means each order has only the exact box volume it requires, eliminating dunnage and using less corrugate.
How to Justify Package Fulfillment Automation
A typical scenario requires fulfillment of at least 1,000 boxed orders daily to get an ROI of 24 months or less. Any volume above 1,000 orders daily will increase ROI.
Additionally, a substantial increase in volume over manual packing (for example, 50 orders manually packed versus 500 with automation) can justify automation.
There are other existing factors that may result in a quicker ROI when increasing automation, including:
- Labor shortages. Packaging automation reduces the staffing required for activities such as scanning and sorting.
- Too much box inventory. Packaging automation optimizes corrugate use.
- Excessive carrier charges by DIM weight. Packaging automation can customize box sizes and therefore eliminate unnecessarily oversized boxes.
- Customers posting negative unboxing experiences on social media. Packaging automation provides a better unboxing scenario for end users (whether or not they post it to social media).
- A desire to reduce the organization’s carbon footprint and be more environmentally friendly. Packaging automation delivers greener operations.
Find out more about High-Velocity Packaging Solutions
To talk about how high-velocity packaging and other material handling solutions can make your company more profitable—while increasing both customer satisfaction and environmental responsibility—contact AEC today.