I recently came across an article written by Greg Newman of Agile Network titled “5 Reasons Your Distribution Center May Be Paying Too Much For Shipping.” The article as a whole is well-written and informative, but there is one section in particular I wanted to highlight. The # 3 reason your distribution center may be paying too much for shipping is because you’re “Shipping Too Much Air.” To quote the article:
We see not only a $20 cut to the next day saver price, but also a $14 cut to other next day shipment prices. Do you realize what a huge deal this is? If you ship a dozen or more boxes a day, the cost-savings per year quickly become astronomical! I’d like to invite you to do a little investigative research of your own and see how much you can save with right-sized boxes. Your wallet – and the environment – will thank you for it.
“Most customers have been buying cartons from the same supplier in the same sizes for many years. That’s good for the price of boxes, but it’s bad for freight costs. UPS tells us that not only do smaller tighter packed cartons cost less, but there is far less damage too. Take a look at your orders and see where you can save money. For example, the list price for a UPS Next Day Saver rate for a 15 pound 20”x12”x 14” carton from Philadelphia to Chicago is $141.19. Shave an inch off all sides, and the cost drops to $121.66 almost a $20 savings per carton!”Sounds a little too good to be true, right? Well, that’s why I went ahead and checked UPS’s “Calculate Time and Cost” website on my own to try this out for myself. Take a look at my results below.Here we have a 15 lb. box being shipped from Philly to Chicago with 20″x14″x12″ dimensions:And here is the same package with a one-inch cut on all sides of the box:As you can see, the prices are a little different than the ones listed in the article (I attribute this to not knowing the exact zip code Mr. Newman used in his test), but the results of the cut are the same.
|20″x14″x 12″||19″x 13″x 11″||Difference|
|Next Day Air Early AM||$198.33||$184.20||$14.13|
|Next Day Air||$165.33||$151.20||$14.13|
|Next Day Air Saver||$157.69||$136.35||$21.34|