Optimal pack size = cost optimisation

Optimizing packaging not only has environmental benefits, but also brings economic benefits in the form of reduced costs. Sub-optimal packaging increases costs not only due to the unnecessarily large amount of packaging material used, but also due to higher transport costs. But how to optimise packaging?

The box with automatic bottom and self-adhesive strip is optimal for small shipments due to its dimensions of 16 x 13 x 7 cm.

Optimizing the size of the package embodies the design of a suitable package that is optimally sized and not unnecessarily large. Think also about ensuring that the goods are sufficiently protected during transport.

Factors affecting packaging costs are:

• height and weight of the product,
• packaging design,
• packaging material,
• bulk density (simply the space taken up by the product during transport).

If you decide to optimise the costs associated with packaging and transport, do not do so at the expense of the quality of the materials used. Otherwise, you may reduce your costs for boxes and filling material, but you may lose out on dissatisfied customers who have received damaged goods. Packaging can be efficiently optimised in other ways than taking the risk of using cheaper packaging material.

The critical cost factor in optimizing packaging is the shipping density of the package, which is the weight per cubic meter. Transporting 100 kilograms of feathers can be more expensive than transporting 100 kilograms of ball bearings. Designing a shipping package that makes the load fit better on a pallet or in a truck will reduce shipping costs. Packaging designed in this way can reduce your costs by 10%.

Find out the optimum bulk (dimensional) weight of the package

Dimensional weight represents the density of a package, which is the amount of space a package takes up in relation to its actual weight. Most shipping companies, such as DHL, UPS or FedEx, use a proprietary formula to calculate the dimensional weight of a package, which is then subject to individual shipping rates. However, it is simply calculated as a multiple between the length, width and height of the package, which is then divided by a factor that varies from company to company.

According to FedEx, the biggest current trend in logistics is to reduce the packing density of shipments. This means that companies that don’t pack their products efficiently are literally paying the price. A shipment is at its optimal packing size when the dimensional weight is as close to the actual weight of the package as possible. Shipping companies determine the price for shipping based on whichever weight is higher.

Taking the effort to determine the optimal package size that will guarantee adequate dimensional weight, and therefore the lowest freight rate, is an effective way to reduce costs. Instead of a one-package-for-all strategy, we recommend trying individual packaging tailored to the products being transported.

Material costs represent on average 60% to 80% of the total packaging costs. The material cost depends on various parameters such as type, quality, construction or the packaging manufacturer itself. Although at first glance it may seem that less packaging material means lower costs, this may not be the case at all. In terms of the functional properties of the packaging itself, the exact opposite is true. The trade-off is to find a balance between the design and the size of the packaging. Different designs of the same volume sometimes need different amounts of material. With some types of materials, “swapping” the height and width of the package can save 20% of the material used.

Some tips on how to optimise packaging:

• Try not to exceed the weight limit of the consignment above 70 kilograms.
• Try not to make the consignment longer than 270 centimetres (108 flats).
• Try to keep the length and circumference dimensions within the shipping company’s limit, which would result in additional charges for excess freight.
• If possible, choose a rectangular package shape that can be built to hold at least four packages on top of each other.
• Consider consulting an expert on the optimum size and design of the package

If you optimize your packaging dimensions, you will optimize your costs, which will not only save you money, but also reduce waste, have cheaper shipping and fewer complaints.