Rising shipping costs: How custom packaging protects your brand and bottom line

After a few years of moderate rate increases, shippers and parcel carriers announced this year a general rate increase of an average of 6.9%. At the same time, it continues to become more common to ship large, bulky items and easy-to-break items – everything from fragile electronic automotive parts to large smart appliances and flat screen televisions.

With freight costs on the rise, companies can help offset these increases by carefully considering the type of packaging they use to ensure they are optimizing shipping costs and protecting their products from costly damage.

This means that companies need to take a close look at the materials they use, including the amount of protective packaging and the size of the carton, to ensure these products survive the shipping cycle and reduce the costs associated with replacing damaged product.

As touchpoints increase, so do opportunities for damage

Nowadays and with the rise in e-commerce for items of every size, there are a lot more steps to the shipping process than there used to be.

In the past, items would be handled an average of five times going from manufacturer to distribution center, and then to a retail store. In an e-commerce single parcel delivery supply chain, an item will be touched by various players across the fulfillment journey an average of 20 different times, traveling through several shipping platforms before it gets to its final destination.

With so many additional touchpoints, what are the odds that your flat screen TV is going to arrive undamaged? SEE® data gathered from hundreds of customers around the globe reveals that large, fragile, higher value items are experiencing damage rates of more than 20%.

As the shipping process becomes more complicated, and more costly, that means there are many more complexities to consider in designing the right package for all these shipping methods. And, packages need to comply to the rigorous regulations and standards set by various organizations, shippers, distribution centers and the International Safe Transit Association (ISTA).

Protecting products with the optimal level of packaging

This is where custom packaging comes in… a packaging solution that is designed specifically for a particular product, company or brand and tailored to the specific needs of the product, considering product features such as shape, size, fragility, and other characteristics.

Custom packaging can help protect products during shipping and handling, reducing the overall costs associated with replacing damaged products. A package that is custom designed to fit your product will be tested to adhere to all shipping regulations and will go through testing procedures including drop testing and vibration testing to make sure it will survive the shipping cycle.

Another thing to consider is the size of your package. Now that shipping carriers are charging by dimensional weight – considering both the size and weight of the package – it’s important to choose a protective packaging material that also optimizes the package size or cube size.

It’s a balance of using the right amount of protection – not too little and not too much. It’s about using the least amount of material to get the maximum amount of protection. You want to make sure products are protected and arrive damage free without adding so much packaging material that the consumer is frustrated by having to dispose of an excess of materials.

And, if a product arrives damaged, it means that a new one will need to be produced, packaged and shipped, adding more cost, more mileage from shipping and more production time, not to mention a dissatisfying consumer experience.

Custom packaging can also address the needs for temperature sensitive products through cold chain or temperature controlled solutions. The design will need to take into consideration what time of year and how far you are shipping, how many days your shipment needs to travel and what types of temperature assurance will be needed to ensure the temperature is maintained to keep your product safe.

Reducing waste: Proper protection makes the greatest impact

When people think about sustainability, they generally think about the last step of the process… is it recyclable, are the materials recyclable? But there’s a lot more to consider when you’re looking at the whole lifecycle of a package.

Preventing damage by using the optimal level of protection is one of the most important ways you can prevent waste and address overall environmental impact. Consider this: if damage occurs, the product may need to be sent back and a new product will need to be manufactured and shipped out. This process adds to the carbon impact of the product and more energy and resources will need to be used to make the new product. Even small damage percentages have a big impact on the environment.

For example, let’s say you are shipping a large TV and using 100% recyclable packaging materials. If you’re not using the right type and right amount of materials and the product arrives damaged, then you are adding the damaged product to the landfill and a new one needs to be sent out. And that’s probably the worst scenario for being environmentally friendly. It’s a balance of using the right amount of materials, not too little and not too much.

Custom packaging can also address the amount of storage space needed and help keep trucks off the road by using packing products that expand on demand as they are needed. For example, with packing material like inflatable bubble rolls, you can inflate them on demand, so instead of shipping a truckload of inflated bubble cushioning, you can ship smaller rolls and the customer can inflate them as they need them. This in turn takes trucks off the road, saves storage space in your warehouse and the amount of time it takes to load and unload the truck.

It becomes a balance between sustainability and protection… knowing which materials will best protect your product in shipping along with using the right type and amount of packing materials. And this is where custom packaging can add to sustainability efforts and save money in the long run. It helps reduce waste, cube size and transportation costs by right-sizing your packages with the right type of packaging materials.

Enhancing the consumer experience and building your brand

For consumers, custom packaging can provide a positive experience, which can lead to increased brand loyalty and repeat business. Consumers appreciate packaging that is attractive, functional, easy to open, easy to reuse or dispose of, and with clear instructions – all of this can help enhance their overall experience with your brand.

This provides the opportunity to showcase your brand and create a strong visual impact. Custom packaging allows you to add your company’s logo, colors, messaging and other branding elements to your packaging, which makes your product stand out and promotes brand recognition.

And, we can’t talk enough about product protection. Nothing will hurt your reputation more than a product that arrives disheveled or damaged.

In SEE’s Consumer E-Commerce Experience Study, consumers said they wanted their items delivered in the same condition they’d expect if they purchased it in store, with packaging that is easy to dispose, reuse or recycle, and with packaging enhancements that delight, beyond the functional basics.

Consumers’ packaging preference is first and foremost driven by functionality to protect their ordered products from damage. They also want their package to be right-sized, without a lot of empty space, and they want packaging that makes sense for the product they ordered, including the right amount of protection.

According to 46% of the e-commerce study participants, sustainability and minimizing waste is a core component of the future of packaging.

Packaging waste also can be eliminated through ship-in-own-container (SIOC) packages. According to the e-commerce study, only 5% of shipments were received in SIOC packages, another area of opportunity for earth-conscious retailers.

Custom packaging is about creating a memorable and positive consumer experience. One bad experience can have lasting negative impacts for your brand. And shipping damages can also affect your return rates, affecting customer loyalty and your bottom line.

A recent survey of more than 7,000 consumers found that one of the top three reasons consumers said they returned items was because it was damaged or defective. Sixty-five percent of consumers said they returned boxes because of damage.

Overall, custom packaging can help combat rising freight costs by optimizing packaging size and weight, reducing damage, streamlining logistics, and enhancing brand recognition. These benefits can help offset any increases in shipping costs, ultimately contributing to sustainability goals and providing cost savings for companies.