If you’ve ever ordered anything online, this has undoubtedly happened to you: you open up a too-big box that contains the items you ordered — and a lot of air (or bubble wrap or packing peanuts or some other type of protective dunnage). This mismatch of the item’s size and the box it comes in might seem like a minor problem, but it makes the already expensive last mile even more costly, with higher corrugate cardboard costs and wasted space in delivery trucks (not to mention being a sustainability nightmare).
Approximately three years ago, executives at Northern Tool + Equipment were determined to do something about this, both to save on shipping costs and also to enhance the experience for its customers and warehouse associates. The retailer, which sells to both professionals and DIYers online and at more than 130 stores, deployed a solution from Packsize International that creates an optimally sized box for any product or combination of products. (This brief video on TikTok demonstrates how the technology works.)
“About 40% of the product we sell is shipped, and it could be a wrench or a 3,000-pound pressure washer,” said Shaun Bunch, SVP of Supply Chain Operations at Northern Tool in an interview with Retail TouchPoints. Size wasn’t the only issue: “They don’t make boxes [in the shape of a] snow shovel, for example, so we were often ‘Frankensteining’ boxes together,” Bunch added. “We were causing a lot of waste in terms of the amount of air we were shipping, not providing the right-sized boxes for customers and making it a bad experience for employees finding a way to make it work.”
The retailer integrated its first Packsize machine approximately one year after making the decision to improve its packaging and shipping, and “we now have two Packsize machines in our two largest facilities, with one coming up [for deployment] in our third facility within the next six months,” said Bunch. “On an annualized basis, we’re seeing a 30% reduction in corrugate spend, a 35% increase in trailer cube and a 25% increase in productivity. There’s also been a reduction in product damaged through shipping, because the packaging is so snug, tight and customized.”
The improved unboxing experience also has been a critical benefit, Bunch added: “Our presentation to the end user customer, the way we deliver product to them, is specific to them,” he said. “It’s the experience as a pro: you’re buying a specific tool that you spent a bunch of money on, so it should come in a custom box.”
Reducing Wasted Space
Online retailers can use the ability to customize shipping boxes, for example by printing messages or images on them, as part of their personalization and customer engagement strategies. “We’re always asking, what can we do to connect the customer with the delivery?” said Rod Gallaway, CEO of Packsize International in an interview with Retail TouchPoints. “How about a picture of a dog because you bought dog biscuits? We see these efforts in ecommerce retailing becoming more and more important.”
Packsize, which was founded 20 years ago and now operates in 26 countries, serves customers “from small users to large ecommerce players,” said Gallaway, who sees the company’s mission inextricably tied to the acceleration of sustainability efforts over the past several years.
“The bad news, though it’s good news for us, is that 40% of the boxes you get are way too big, and each truck running has approximately 40% capacity left on it — if we can get it all right-sized,” said Gallaway, adding that “not only is the package too big, but the corrugate is too heavy. I believe there will be a ‘lightweighting’ of corrugate, primarily in North America, followed by Asia and Europe, which will improve and help the capacity issue as well.”
Solution Interfaces with Robotic Warehouse Picking Systems
Additional automation on the horizon is likely to continue boosting important KPIs for Northern Tool. With the current system, a human picker brings the items to the packing station and scans them using the Packsize system, which creates the custom-sized box that a human then fills. It’s then sealed by the Packsize equipment.
The upgraded system, which Bunch projects will be online by October 2023, is designed for smaller items and will work with robotic pickers that retrieve items from distribution center shelves. This Packsize system will create a box automatically, based on the products’ size, weight and shape, and then send it to the packing station, so all the human has to do is put the items in the box.
Helping Northern Tool Meet its Sustainability Goals
Enhanced productivity and a better customer experience are important to Northern Tool, but “there’s a passion around sustainability at the company,” said Bunch, noting that its own green initiatives include “heavy R&D” into battery-powered machinery. The Packsize solution “made sense from a dollars-and-cents as well as an experience standpoint, but all of those [benefits] also mean fewer trucks on the roads, less carbon, less scrap and less utilization of corrugate.”