Shipping and Logistics Archives - Page 9 of 10

Efficient Shippers Use Smart Cartonization Software to Save Big

Shipping costs are one of the largest cost centers for any e-commerce business and are second only to labor costs. With last-mile expenses increasing yearly, finding ways to reduce these costs is more important than ever. Leveraging technology to optimize shipping costs by right-sizing packaging can reduce shipping expenses significantly while improving operational efficiency and positively impacting the environment.

What is Cartonization Software and Parcel Packing Intelligence

One of the most effective ways to reduce shipping costs is to right-size the packaging. The reason is that shipping rates are based on weight. Still, shippers are charged the higher of the actual shipment weight (product in a box) OR the dimensional weight (the package volume in cubic inches turned into a weight value for rating purposes).

Efficient Shippers have reported saving over six figures just by right-sizing their packaging. Additional savings come from lower packaging costs from using less packaging. Further savings are achieved by reducing or eliminating dunnage required to fill the void in the larger box so items ship safely, less tape is used, etc.

The average return rate for ecommerce orders is in the 15 to 30% range (much higher for apparel); right-sizing the packaging would also reduce the cost of return shipping when the original packaging can be re-used for reverse logistics.

Cartonization software (or smart cartonization features built into Order Management Systems or Multi-Carrier Shipping and Fulfillment Software such as Cahoot) can help automate selecting the best packaging for each order, even for complex shipments containing multiple product and quantity configurations. For example, Cahoot software evaluates the dimensions of the items being shipped and auto-selects the smallest box the products can safely ship in from a list of available options in stock. By using cartonization capabilities prebuilt into software like Cahoot, ecommerce merchants can ensure they are shipping orders in the most cost-effective packaging rather than relying on warehouse staff members to guess the correct size. No human means no judgment is needed, and human errors are eliminated.

A crucial part of parcel packing intelligence, i.e., right-sizing shipments is to stock a wide variety of box, non-corrugate packaging and mailer sizes. Many shippers only stock a limited range of packaging sizes, which forces them to use larger boxes when smaller ones would suffice. Expanding the available box sizes can reduce the risk of paying to ship a lot of air. Some shipping and fulfillment solutions even support the tracking and management of packaging inventory, including cost, reorder points, etc.

It’s worth noting that cartonization and packing tools are useless without accurate dimensional data. Easy AI-based tools such as the Qboid M2 Perceptor Mobile Dimensioning handheld device have recently become available, making capturing these details a breeze.

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Increase Sales and Profits through Cartonization Software

For Sellers that can pass shipping costs to their customers, right-sizing packaging increases profits and conversions through more competitive ‘all-in’ product pricing, leading to higher revenues.

Reduce Waste using Smart Cartonization

While used cardboard boxes can be recycled, much of it still ends up in a landfill with a negative environmental impact and a higher carbon footprint. So, right-sizing shipping supplies also helps the planet.

The best way to minimize cost and environmental impact is not to use overpacks at all – ship the items in their original manufacturer packaging. Amazon’s SIPP program (Ships in Product Packaging) was opened to Amazon FBA Sellers in early 2024 to reduce costs and improve sustainability. It’s generally been regarded as successful.

It’s recommended to collaborate with suppliers to design product packaging to optimize for shipping costs, staying away from the surcharges carriers impose on “oversize” shipments.

Dimensional Weight

As mentioned above, DIM weight considers the package’s volume, meaning large boxes, even when filled with light products, can incur substantial shipping charges.

The DIM weight is calculated by multiplying the package’s length, width, and height, then dividing by a DIM factor set by the carrier. FedEx and UPS typically use a DIM factor 139 for domestic US shipments, while the USPS uses 166. The higher the DIM factor, the more “air” you can include in a package before triggering the DIM weight pricing.

For example, if you use a 12″x12″x12″ carton, it will be billed as a 13-pound package by UPS and FedEx based on its volume, even if the actual contents weigh much less (a box of cotton candy, as an extreme example). Over time, these minor discrepancies can add up to thousands of dollars in extra shipping fees. Switching to smaller cartons that more appropriately fit your products can help reduce these DIM weight charges. It also minimizes the need for excess void fill, such as bubble wrap or packing peanuts, which adds cost and waste to each shipment.

An example:

Shipping this 2.25 lb product 8 zones in a slightly larger box than the product (8 x 5 x 5) will cost $9.52 using USPS Ground Advantage. Shipping this 2.25 lb product 8 zones in an adequately fitted box (8 x 5 x 3) will only cost $8.35 using USPS Ground Advantage. This is only 2 inches longer on one side but represents 40% air (200 cubic inches vs. 120 cubic inches). That’s over 12% savings on just one shipment and not that egregious of an example. And not including all the waste saved as described above.

Summary

Reducing operations expenses must be a forethought to achieve continued business success. By utilizing technology like cartonization software to optimize shipment packaging, not only are shipping cost savings guaranteed, but the cost of the supplies goes down, operational efficiency goes up, and more sustainable business practices not only result in lower carbon emissions and less waste but it can also enhance brand reputation.

Written By:

Rinaldi Juwono

Rinaldi Juwono leads content and SEO strategy at Cahoot, crafting data-driven insights that help ecommerce brands navigate logistics challenges. He works closely with the product, sales, and operations teams to translate Cahoot’s innovations into actionable strategies merchants can use to grow smarter and leaner.

How Much is Free Shipping REALLY Costing You?

Gone are the days when you could actually make money on shipping. Merchants are all too willing to move to a free shipping model without being aware of the entire cost of shipping a package. If you’re offering free shipping, it’s probably costing you 30 percent MORE than you think. If you talk to many companies that offer free shipping and ask, “How can you afford this?” Their answer: “I work the cost of shipping into the product.”

There are many other costs involved in shipping a product in addition to postage. Are you monitoring your delivery area surcharge (DAS) or extended delivery area surcharge (EDAS)? Most carriers have these charges.

A good exercise for companies doing ecommerce order fulfillment is to look at your average monthly packaging, warehouse labor and credit card fees, then divide that total by the number of packages you shipped

Read the full article here.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Post Office Wants to Shift Focus from Mail to Ecommerce Deliveries

The shipping world has changed dramatically over the past decade. Since 2007, total U.S. mail volume has declined 31% to 146 million pieces, including a 41% drop in first-class mail, its most profitable product. At the same time, ecommerce has exploded, offering a way to plug the lost revenue while also adding burden to USPS operations as it handles more packages. USPS has already started to dip its toes into 7-day a week delivery to manage the 20 million packages it averages daily. It now delivers some Amazon.com packages on Sundays and also other ecommerce retail fulfillment during the busy Christmas holiday season.

The agency lost $3.9 billion in 2018, its 12th straight year of losses. According to the agency, this move better reflects the market conditions and would save it billions of dollars per year. Republican and Democratic members of Congress, however are opposed to making a change to mail deliveries.

Read the full article here.

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Teamsters Vote Down UPS Contract but Negotiations Continue

According to the Wall Street Journal, 54.3% of 243,000 Teamsters members that include UPS drivers, sorters and other workers voted against a new five-year contract Friday, while 62.1% of 11,000 freight workers voted down a separate agreement; several regional and local deals were voted down as well.

Union rules require a two-thirds vote to reject a contract when less than 50% of members vote.

Read the full article here.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Global Postal System Fast-Tracks Rate Review After Trump Pullout Threat

WASHINGTON—A Trump administration threat to pull out of a global mail system over its discounted shipping rates from China could spur a change in those rates as early as April, the head of the United Nations agency that oversees the system said.The U.S. last week started a year long process to withdraw from the 144-year-old Universal Postal Union because it had failed to eliminate international discounts. Those discounts, aimed at helping developing countries, have continued to apply to China even as it has grown to become the world’s second-largest economy. They can make it cheaper to ship small packages from China to the U.S. than from locations within the U.S.

The move was the latest salvo by the Trump administration against China and a reminder of the president’s willingness to abandon international organizations that he says don’t help U.S. interests. American manufacturers welcomed the move, saying the flood of cheap goods from China undercut their business. The UPU, which is now holding previously scheduled council meetings, commissioned a report Tuesday that is the first step toward fast-tracking new rates, Director General Bishar Hussein said in an interview.

“If we work fast enough, and the member countries are all in consensus on these issues and decisions are made, by April next year I think it is a possibility,” Mr. Hussein said.The discounts also benefit countries including Russia and Mexico. The U.S. has stressed that its decision isn’t only about China, though that obviously is a large factor. Administration officials have said the lower rates cost the U.S. Postal Service some $300 million a year, with discounts ranging from 40% to 70%. Mr. Hussein said he welcomed the move by the U.S. if it manages to reform the group’s “archaic” rates.

Slash Your Fulfillment Costs by Up to 30%

Cut shipping expenses by 30% and boost profit with Cahoot's AI-optimized fulfillment services and modern tech —no overheads and no humans required!

I'm Interested in Saving Time and Money

“Now with the U.S. coming in and saying, ‘Sorry, enough is enough,’ I think this is going to take the conversation to another level, and I’m very happy to see that,” Mr. Hussein said.

Mr. Hussein stressed that even a fast-tracked process has many steps, including the research report, a proposal and a vote by members. At least half of the organization’s 192 members have to vote for a proposal to be considered, and it can pass only with a two-thirds majority.

If the U.S. were to withdraw from the UPU, it would lose access to global processing and coding systems that make international mail possible, and it would have to negotiate bilateral postal agreements with every individual country, Mr. Hussein said. The U.S. has said it hopes to negotiate a solution that keeps it from having to withdraw from the UPU, but also has said it is proceeding with a plan to institute “self-declared” rates that could take effect within six months.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Managing Through Record 2019 USPS Rate Increases

Recently, the USPS proposed a record price increase. If approved, which is expected, the higher rates will go into effect on Jan. 27, 2019. This will be the biggest rate increase in USPS history. Amazon’s retail operating income would take a 5 percent hit from shipping cost inflation if the new rates take effect, according to Barclays.

Here are some of the significant proposed 2019 USPS Shipping rate changes:

The elimination of Commercial Plus Pricing (CPP), where now Priority Mail pricing will match Commercial Base Pricing (CBP). Many e-commerce and subscription trade shippers will be facing a painful price increase with the elimination of CPP programs.
A conservative 5.9 percent Priority Mail increase is expected, while First Class Flat Pricing will change to zone-based pricing with an expected 11.9 percent increase. For shippers with a high proportion of outer zone shipments, the increase will be appreciably higher (as much as 21 percent).
Perhaps most concerning is the pending reaction of UPS and FedEx as they re-evaluate their “hybrid” postal delivery products that use the USPS for last-mile delivery. Buried in the postal rate change are increases ranging from 9 percent to 30 percent on the work-share rate structures used by UPS and FedEx.

Read the full article here.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

The Post Office Wants to Raise the Fees it Charges Amazon and Other Shippers

The parcel select service, which is also used by United Parcel Service and FedEx, is the last and typically the most expensive step in the shipping process that gets the packages to customers’ doorsteps. The USPS proposed a 9.3 percent increase on this service for packages weighing over one pound and a 12.3 percent increase on lighter packages.

Trump issued an executive order in April to set up a task force to examine the USPS, claiming that it was on an “unsustainable financial path.” He’s also tweeted that the USPS is Amazon’s “delivery boy” and doesn’t make money from Amazon’s business.

Read the full article here.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

UPS 2019 Rate Increase of 4.9% Given 3 Weeks Before Effective Date

Last year UPS announced its general rate increase (GRI) in October, and in September the year before that. FedEx announced its 4.9% GRI for 2019 in early November. While the new FedEx rate schedule takes effect Jan. 7, UPS’s hike happens as of Dec.26, meaning it will hit the first massive wave of Christmas returns.

“This year (UPS) announced it three weeks before the effective date and in the heat of the fourth quarter peak shipping,” said parcel consultant Jerry Hempstead. “Large shippers will have little time nor the IT resources to sift through the nuances of this year’s announced changes.”

Read the full article here.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Warehousing Services: How to Choose the Right Provider

Warehousing Isn’t Just Storage Anymore
Types of Warehouses: Finding the Right Fit
What You Should Really Look For
Technology and Automation in Modern Warehousing
Cold Storage, Cross Docking & Specialized Services
Returns and Reverse Logistics: Managing the Flow Back
How Cahoot Approaches Warehousing
Wrapping It Up
Frequently Asked Questions

When you oversee a nationwide warehouse network like I do, you get a front-row seat to what works, and what definitely doesn’t, in modern warehousing services. The right provider can deliver a competitive advantage by streamlining logistics and reducing costs.

I’ve spent years watching ecommerce brands scale up (or burn out) based on warehouse choices. The right warehousing solutions for ecommerce businesses can boost margins and CX. The wrong one? That’ll tank both.

So, how do you choose the right provider when every one of them promises to cut costs, improve service, and handle your inventory management? Choosing wisely is the smart way to optimize warehousing services for business growth.

Warehousing Isn’t Just Storage Anymore

Ten years ago, a warehouse space was just a place to store goods, serving as a storage facility within the supply chain. Today, it’s the beating heart of your supply chain.

Smart warehouses now offer:

Real-time inventory tracking
Warehouse automation
Cross-docking services
Fast order fulfillment
Seamless reverse logistics
Efficient order processing

A well-organized shipping dock is also crucial for ensuring smooth inbound and outbound logistics.

But not every provider can deliver all of this with consistency. I’ve seen too many 3PLs overpromise and underdeliver.

Slash Your Fulfillment Costs by Up to 30%

Cut shipping expenses by 30% and boost profit with Cahoot's AI-optimized fulfillment services and modern tech —no overheads and no humans required!

I'm Interested in Saving Time and Money

Types of Warehouses: Finding the Right Fit

When it comes to optimizing your supply chain, not all warehouses are created equal. The right warehousing solutions depend on your business model, inventory management needs, and growth plans. Here’s a quick breakdown of the most common types of warehouses and how they can help you maximize efficiency:

Private Warehouses: Owned and operated by a single company, these facilities offer complete control over warehouse operations, inventory management, and security. They’re ideal for businesses with high-volume, consistent storage needs and a desire for tailored solutions.
Public Warehouses: These storage spaces are shared among multiple businesses, making them a cost-effective option for companies looking to reduce warehousing costs. Public warehouses provide flexible storage space and shared resources, which are perfect for businesses with fluctuating inventory levels or seasonal spikes.
Bonded Warehouses: Specializing in imported goods, bonded warehouses allow you to store products before customs clearance. This can help businesses manage cash flow and compliance while keeping inventory secure until duties are paid.
Distribution Warehouses: Focused on aggregating stock from various suppliers, distribution warehouses streamline wholesale deliveries and help businesses improve efficiency in their supply chain.
Fulfillment Warehouses (3PLs): Third-party logistics providers offer a full suite of services, including inventory management, order fulfillment, and shipping. These solutions are designed for businesses that want to outsource warehouse operations and focus on scaling their core business.

By understanding the strengths of each warehouse type, you can select the solution that best fits your warehousing needs, reduce costs, and deliver a higher level of customer satisfaction.

What You Should Really Look For

From my seat, the top-performing fulfillment centers I’ve worked with share a few traits. Choosing a reliable fulfillment partner is crucial for optimizing your storage solutions, reducing costs, and improving overall supply chain efficiency.

Operational excellence: Processes are clean, predictable, and built for continuous improvement.
Technology-driven: If they’re not offering a warehouse management system with visibility, move on. Make sure their systems and automation are implemented correctly to ensure seamless operations and maximum efficiency.
Strategic warehouse locations: Coverage matters more than you think, especially for fast delivery.
Value-added services: Think kitting, bundling, or returns processing. Reliable delivery is also a critical component of customer satisfaction.
Transparent pricing: Avoid black-box pricing models. They always cost more.

Looking for a New 3PL? Start with this Free RFP Template

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Technology and Automation in Modern Warehousing

Modern warehousing is driven by technology and automation, transforming how businesses manage inventory, order fulfillment, and warehouse operations. Today’s smart warehouses leverage advanced warehouse management systems (WMS) to provide real-time inventory tracking and complete visibility across the supply chain. This means you can monitor inventory levels, storage space, and outbound orders from anywhere, at any time.

Warehouse automation, like robotic picking, automated conveyors, and AI-powered sorting, boosts operational excellence by reducing manual errors and labor costs. Proprietary systems, such as RyderShip and RyderShare, take it a step further by integrating real-time data, enabling businesses to make informed decisions and respond quickly to market changes.

Technologies like RFID, GPS, and IoT sensors offer real-time visibility into inventory movement and storage conditions, ensuring products are appropriately packed and stored. These innovations help businesses drive efficiencies, cut costs, and gain a competitive edge in a fast-moving market.

By embracing smart warehouses and advanced technology, businesses can optimize warehouse management, improve order fulfillment speed, and maintain complete control over their operations, no matter how complex their supply chain becomes.

Cold Storage, Cross Docking & Specialized Services

More and more brands I work with need cold storage, bonded warehouse options, or cross-dock facilities. But finding providers that can scale specialized services and still offer a competitive edge? That’s tough. In certain industries, there is also a need for dedicated storage of raw materials to support manufacturing and production processes.

This is why tailored solutions and shared resources matter. Especially if your brand has excess inventory or seasonal spikes, effective inventory control is crucial for maintaining accuracy and optimizing operations.

These specialized services not only improve efficiency but also play a key role in reducing costs for businesses.

Returns and Reverse Logistics: Managing the Flow Back

Returns and reverse logistics are no longer an afterthought; they’re a critical part of the modern supply chain. Efficient returns processing can make or break customer satisfaction, especially in ecommerce, where expectations for fast refunds and exchanges are high.

A leading provider of warehousing solutions will offer specialized services for reverse logistics, using advanced technology to streamline the flow of returned goods. Cross-docking services can minimize storage time by quickly sorting and redirecting returns, while distribution services ensure products are processed and restocked or disposed of efficiently.

By implementing robust reverse logistics systems, businesses can reduce warehousing costs, improve service levels, and gain valuable insights into product quality and customer preferences. This data-driven approach not only helps cut costs but also drives your business forward by identifying opportunities for continuous improvement.

Partnering with a provider that excels in returns management means you can maintain high customer satisfaction, optimize your supply chain management, and stay ahead in a competitive market.

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How Cahoot Approaches Warehousing

At Cahoot, we operate an extensive network of fulfillment centers with high standards across every node. We’re not just brokering space. We govern how that space operates, with standard SOPs, system integrations, and SLA accountability.

Our warehousing approach includes:

Advanced technology for tracking and routing
Support for cold storage and specialty goods
Strategic locations near key metro hubs
Reliable service, even during peak season
Flexible storage solutions for different business needs

I collaborate daily with our operators to ensure everything runs like a system, not a collection of parts. Cahoot provides comprehensive warehouse solutions to address diverse supply chain challenges.

Wrapping It Up

Choosing a warehousing provider is less about how many square feet they have and more about whether they can support your long-term business’s success.

It’s also crucial to select a provider that prioritizes the needs and satisfaction of your customers, ensuring their experience is seamless and positive.

Ask hard questions. Demand transparency. And choose a partner that helps you scale smart, not just fast.

Frequently Asked Questions

What are warehousing services, and how do they support ecommerce businesses?

Warehousing services include inventory storage, order fulfillment, returns processing, and value-added services like kitting or labeling, all essential for ecommerce scalability.

What’s the difference between a shared warehouse and a dedicated warehouse?

A shared warehouse serves multiple businesses using shared resources, while a dedicated warehouse is reserved for one client, offering more control but at a higher cost.

What are the most important features to look for in a warehousing partner?

Key features include real-time inventory tracking, automation, cross-docking capabilities, temperature control, and flexible storage options.

How do warehousing services help reduce costs?

By streamlining inventory management, improving order accuracy, and using strategically located warehouses, businesses can cut transportation and storage costs.

Why choose Cahoot for warehousing services?

Cahoot’s nationwide network of fulfillment centers offers advanced tech, real-time tracking, and flexible storage, all optimized to meet ecommerce warehousing needs efficiently.

Written By:

Jeremy Stewart

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

FedEx Announces 2019 General Rate Increase

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

In this article

What is Cartonization Software and Parcel Packing Intelligence

Let AI Optimize Your Shipping and Boost Profits

Increase Sales and Profits through Cartonization Software

Reduce Waste using Smart Cartonization

Dimensional Weight

Summary

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Slash Your Fulfillment Costs by Up to 30%

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Warehousing Isn’t Just Storage Anymore

Slash Your Fulfillment Costs by Up to 30%

Types of Warehouses: Finding the Right Fit

What You Should Really Look For

Looking for a New 3PL? Start with this Free RFP Template

Technology and Automation in Modern Warehousing

Cold Storage, Cross Docking & Specialized Services

Returns and Reverse Logistics: Managing the Flow Back

Scale Faster with the World’s First Peer-to-Peer Fulfillment Network

How Cahoot Approaches Warehousing

Wrapping It Up

Frequently Asked Questions

What are warehousing services, and how do they support ecommerce businesses?

What’s the difference between a shared warehouse and a dedicated warehouse?

What are the most important features to look for in a warehousing partner?

How do warehousing services help reduce costs?

Why choose Cahoot for warehousing services?

Turn Returns Into New Revenue

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