Big retailers are adopting innovative technology in their e-commerce distribution operations to address the issue of oversized packaging for online orders, reports the Wall Street Journal.
In the US, Walmart has already installed machines at 12 of its fulfilment centres that produce custom boxes designed to fit specific items, resulting in a reduction of cardboard and filler material usage per order. The retail giant plans to expand the use of this technology to more facilities.
Amazon.com, the largest e-commerce merchant in the US, has also been utilising made-to-fit packaging since 2016 and is actively increasing its implementation.
Made-to-fit boxes cut costs and environmental impact
Traditionally, retailers have relied on fixed-size boxes to fulfil online orders, leading to inefficiencies and wastage due to the wide range of products available.
The urgency to deliver goods quickly has further exacerbated this problem, as workers often resort to using the closest available box. To address these challenges, Walmart is utilising machines from the packaging technology company Packsize International to create custom boxes by cutting, creasing and glueing corrugated cardboard based on the dimensions of the shipped items.
On the other hand, Amazon employs technology from CMC SpA, an Italian automation company and has witnessed a 38% reduction in average packaging weight per shipment since 2015.
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The adoption of custom box machines has been facilitated by advancements in their speed and functionality, enabling companies to incorporate them into their operations without compromising fulfilment efficiency.
The surge in online orders during the Covid-19 pandemic has further accelerated the investment in automation in distribution centres. By targeting this technology, companies aim to reduce cardboard waste and shipping costs.
With e-commerce accounting for 14.7% of overall US retail sales in the second quarter of 2022, up from 5.8% a decade earlier, the accumulation of cardboard waste has become a prominent issue.
Efficiency boost achieved through package size reduction
Apart from being environmentally friendly, made-to-fit boxes offer cost-saving benefits by optimising space utilisation in trucks and delivery vans. Gartner analyst John Blake explained that companies could drive efficiency by reducing package sizes, considering the limited space available in vehicles.
Electronics seller Crutchfield Corporation has been utilising custom packaging for approximately ten years. The adoption of automation has halved their average box size, resulting in reduced shipping and packaging expenses.
The company estimates saving $7m annually, with an initial savings of approximately $300,000 achieved in the first year by eliminating excessive packaging materials.
By implementing custom box technology, retailers aim to mitigate cardboard waste, streamline shipping operations and reduce costs while meeting the growing demands of online shopping.