Since the pandemic there has been dependency on the e-commerce model where fulfillment services and supply chain have become paramount. Major brands and firms who could not handle orders within their own internal walls sought out third party logistics companies. This created a entirely new market for supply chain companies. With these ramp ups there has been major challenges to provide packaging meeting everyone’s ones needs. What has emerged is material and fiscal waste leading to a poor overall packaging and customer experience.
Example of Supply Chain/Fulfillment Debacle
A customer purchased tools from a brand. The company outsourced the fulfillment of their product to another entity. This is what the customer received:
Not so Obvious Packaging Issues
From the image above anyone can clearly see there’s an issue with container selection by the fulfillment company. The product needs to go in proper packaging. Or have dunnage/void fill added.
What’s not so obvious is the fulfillment company does not care about container size at all. The company is paid by piece or a daily rate. The fulfillment company completed their task and ships the product out through a third party. The product company may or may not be on the hook for increased shipping costs depending on their contract terms.
Excess packaging material being used, shipping of air, and increased packaging dimensions creates a higher price. In turn, the costs are directly passed along to the customer. Product companies and fulfillment/supply chain companies need to get smart by resolving these issues before it hits the customer’s doorsteps. Especially with the costs of shipping increasing year over year and product and packaging material prices soaring. The overall profit margin for the product company will dwindle and the number of shipments by the fulfillment company will suffer. Ultimately customer’s will shop elsewhere; creating a lose-lose-lose situation.
We Can Help!
Business needs to be aware of the bigger picture when they ship product. Hiring Pack Protocols to mitigate these unforeseen cost challenges and create a winning resolution! Contact us today at 657-204-6093.