In the realm of supply chains, a significant shift is underway that might have escaped your notice. It’s a revolution centered on the size and density of packages and shipments. In fact, it boils down to two main forces driving this change. First, transportation carriers are more frequently billing shippers based on their shipment dimensions, not the actual weight or weight class. Second, there is an increasing concern by all of us that shipment packaging contributes to CO2 emissions. Thus, more and more shippers are beginning to look at package dimensions and how to reduce air in their shipments as well as reduce CO2 emissions.
In this article, I’ll look at how dimensional pricing and sustainability priorities are driving changes in how supply chains ship products. Additionally, I’ll explore how package engineers, software, and even robotics can help supply chains implement optimal packing solutions for packing parcels as well as for loading pallets, and trucks.
- 1. Transportation Carriers Are Adjusting Their Pricing to Align With their Fleet’s Cargo Space Dimensions.
- 2. How Reducing Your Package Dimensions Lowers Both Shipping Costs and CO2 Emissions.
- 3. Packaging Engineers, the Experts in Product and Shipment Packaging.
- 4. Cleaning Up Your Master Items List: The Dangers of Garbage In, Garbage Out (GIGO) with Package Dimensions Data.
- 5. The Bin Packing Problem: Tech to Optimize Package Packing, Palletization, and Truck Loading.
- 6. Robotic Shipment Packing: The Future Looks Bright If the Data Is Right.
1. Transportation Carriers Are Adjusting Their Pricing to Align With their Fleet’s Cargo Space Dimensions.
Transportation carriers are changing their pricing models to better reflect the spatial economics of their fleets. It’s no longer just about the shipment’s weight or weight class when it comes to pricing. Now, carriers are billing increasingly more shipments by their dimensions rather than by actual weight. The carriers are doing this because the square footage of their cargo space more directly reflects their costs for moving freight. Thus, carriers are leveraging sophisticated algorithms based on package dimensions to price shipments. For instance, below is a simple description on how package dimensions are determined that in turn drives pricing for a typical parcel carrier such as UPS FedEx, or USPS.
Simple Description of How Dimensional Weight Is Calculated
- First, Measure the length (L), width (W), and height (H) of the package in inches, rounding up to the nearest whole number.
- Then, Calculate the Billed Weight by multiplying L X W X H divided by the carrier’s dimensional (DIM) factor, then round up. If this dimensional weight is higher than the actual weight, this then becomes the billed weight.
Now, this is a very simplistic explanation of package dimensional pricing and does not fully address additional package handling charges triggered by girth, height, and distance (zone). Surprisingly, some of these accessorial fees can exceed the price of the package charge. For more details on DIM pricing and package handling fees, see my article, Large Package Shipping Mistakes And How To Ship More Cheaply and ShipBob’s article, DIM Weight Calculation: How to Calculate Dimensional Weight Pricing.
2. How Reducing Your Package Dimensions Lowers Both Shipping Costs and CO2 Emissions.
Diminishing the footprint of your packaging is a dual victory; it’s a win for your wallet and a win for the environment. Shrinking package dimensions can lead to a cascade of cost savings across the logistics spectrum, from reduced material usage to lower freight charges. Moreover, this contraction in packaging leads to denser shipments, allowing more products to be transported using less vehicular assets. Thus, this in turn slashes CO2 emissions.
a. Use of Sustainable Packaging to Reduce Costs and CO2 Emissions.
Indeed, sustainable and smart use of packaging is a great way to reduce shipping costs and protect the environment. First, sustainability begins with the product packaging to include inserts, tape and labels. The creation and use of all these components impact emissions and can affect shipment package size.
Next, there is the effect that shipment packaging has on the size and density of a shipment. This includes the dimensional impact on a single parcel up to a full truckload shipment. In these cases, packaging for a small parcel can include such things as a cardboard box or mailing pouch. For larger shipments this can include pallets and dunnage. All of these affect both the dimensions of the shipment and its carbon footprint.
So, the types of materials that are used to both protect and contain a shipment order can greatly affect sustainability as well as costs. For a more detailed discussion on sustainability packaging, see Radial’s article, Love the Earth: 9 Ways eCommerce Retailers Can Create Impact with Sustainable Packaging and Econenclose’s article, Right-Size Your Sustainable Packaging.
b. Reduce Air in Boxes to Reduce Costs and CO2 Emissions.
Minimizing the amount of air in a shipment will substantially cut costs and CO2 emissions. For instance, according to paccurate the average shipment contains up to 64% air in some product categories. Undoubtedly, most of us have had a real-life experience with this phenomenon. For instance, most of us have experienced surprise when receiving and opening a large parcel only to find a single small item inside. Indeed, this is inefficient and costly, and does not reflect well on the shipper. Moreover, because there is so much air in many shipments, this results in more trucks on the road emitting more CO2. Undeniably, reducing air in shipments down to 20% would greatly diminish shipping expenses and environmental impact.
3. Packaging Engineers, the Experts in Product and Shipment Packaging.

Traditionally, supply chains have treated packaging engineering as a back-office function where their expertise is needed from time to time. In fact, most package engineers focus primarily on packaging for new products and not as much on shipment packaging. Now with the growth of ecommerce, there is an increasing need for their services in the area of shipping, especially parcel shipping. For those of you that are not familiar with packaging engineers, they have interdisciplinary skills to include industrial engineering, marketing, package science, and even graphic design. For more information on package engineers, see PackHelp’s article, What is a packaging engineer and why you should work with one.
Traditionally when it comes to shipping, the package engineer’s primary goal is to identify a packaging solution that made sure the product was adequately protected at the least cost. Now with the rise of ecommerce and carriers’ increased use of dimensional pricing, the focus of a package engineer is expanding. Now, the packaging engineer needs to focus increasingly on minimizing the amount of air in the package as well as make the shipment packaging more attractive to the consumer.
Indeed, being a packaging engineer is a highly challenging and creative profession that involves developing packaging solutions for a myriad of shipment types. For instance, these solutions can range from the transportation of frozen meats to the home delivery of large appliances like refrigerators.
4. Cleaning Up Your Master Items List: The Dangers of Garbage In, Garbage Out (GIGO) with Package Dimensions Data.
Data integrity is increasingly a key ingredient for effective supply chain management, and nowhere is this truer than in the realm of packaging dimensions. The adage “Garbage In, Garbage Out” holds significant importance here. For instance, inaccurate or outdated dimensions in your master items list can wreak havoc within any packing optimization efforts. Thus, this leads to inflated shipping costs and operational inefficiencies.
Indeed, all warehouse and order fulfillment operations need an effective strategy to assure that they have an accurate master item list in order to optimize shipment packing. Undeniably, an accurate master item list is needed for both optimal cartonization and palletization. Both these optimization processes, either automated or manual, rely on a detailed, accurate master item list. These processes are defined below:
Cartonization and Palletization Definitions
- Cartonization is a process that determines the best way to package an order by evaluating the items in it and choosing the right size, type, and quantity of containers.
- Palletization is the process of stacking goods onto a pallet for shipping, storage, and transportation.
Additionally, these packing optimization processes need more than just accurate weight and dimensions. For example, below are the types of data element characteristics needed in an item master for packing optimization:
Master Item Data Needed for Packing Optimization
- Product Dimensions. This includes the length (L), width (W), and height (H).
- Unit of Measure (UOM). For instance, is the product measured in inches or centimeters?
- Master Case and Inner Pack. This is essential for both efficient storage and picking strategies.
- Piece Configuration. This is key for both picking and packing. Need to know how individual items are arranged within cartons.
- Cartons per Pallet and Layering. This is key for optimal palletization for less-than-truckload (LTL) and truckload shipments.
- Specialized Fields. Especially for shipping, this can include attributes such as temperature control requirements, expiry dates, hazmat classification, and country of origin.
For a more detailed discussion on the importance of the accuracy of the master item list for shipping, see OPS Design’s article, ITEM-MASTER DATA ACCURACY: THE BASIS OF SUPPLY CHAIN EFFICACY and IQPack’s article, Item Master Accuracy is Key to Reducing Shipping Costs.
5. The Bin Packing Problem: Tech to Optimize Package Packing, Palletization, and Truck Loading.
The Bin Packing Problem (BPP), a mathematical puzzle, is also at its essence what logisticians are attempting to solve when packing a box, a pallet, or an entire truck. Indeed, the goal for each of these tasks is to pack a set of items into a minimum number of “bins” (containers). Over the decades, mathematicians have developed several mathematical solutions to the Bin Packing Problem (BPP). This continues today, where BPP software algorithms are increasingly used today to solve a wide range of packing problems.
So to stay competitive, it is critical that every logistics operation have an optimal bin packing strategy. Indeed, an optimal strategy will significantly save money, improve efficiency, and reduce environmental impact. So to implement a bin packing strategy, every operation will need to leverage both packaging expertise and technology to achieve an optimal bin packing strategy.
a. Packing Optimization Seems Easy, But Is It?
On the surface, many operators may think packing a box is an easy thing to do. Also, it seems like it would be even easier with good master item data and using a simple software package. However, there are many variables, trade-offs, and evolving technology to consider when developing an optimal packing strategy. For instance, below are some things to consider prior to implementing a bin packing solution.
Bin Packing Considerations
- Sizes of Containers. For example, an operation may only have a small and large box, or dozens of shipping container types.
- Sizes of the Items to Packed. Here a shipment order could consist of any combination of 5 SKUs or even 20,000 SKU combinations for one container.
- Additional Packaging Needed. For example, a frozen food package may need more ice packs for delivery across the country in the summer.
- Weight Constraints. Here a box may have a 25 lb weight limit.
- Loading / Unloading Sequence. This is a key criteria for loading a truck with multiple stops.
- Delivery Considerations. For instance, a pallet would not work for a residential delivery.
- Dimensional Pricing Considerations. Instead of incurring a large package charge, it is best to break the order into multiple boxes.
- Stacking Limitations. For instance, don’t place a bag of marshmallows on the bottom of a box.
- Foreknowledge of Items to Pack. In some cases, such as loading a truck or pallet the loader (manual or automated) the “loader” may only have foreknowledge of some of the items to pack. It is only later in the packing process that the other items to pack become known.
b. Need Both Tech and Expertise Tailored to Your Particular “Bin” Packing Problem.
Based on the variables listed above, technology available, facilities, and cost consideration will determine what type of bin packing strategy you should implement. Indeed, the solution you pick could be completely manual, software-assisted, or completely automated. Further, there is a full range of software and associated BPP algorithms that you can use based on your situation. For instance, there are algorithms based on mathematical optimization, reinforcement learning / ML, and that are rules-based. All of these types of solutions are applicable depending on your situation.
For more readings on The Bin Packing Problem (BPP) as it applies to shipping, see these articles:
- Amazon: How Amazon is using AI to deliver customer orders with less packaging
- Aaxis: Optimizing Ecommerce: Solving the Bin Packing Problem
- ShipperHQ: Dimensional Packing: Packing Products into Boxes (Best-Fit)
- anylogic: Solving the Bin Packing Problem in warehousing and logistics – strategy comparison
- Optioryx: 3D Bin Packing: The Tetris of Logistics
6. Robotic Shipment Packing: The Future Looks Bright If the Data Is Right.
As shippers realize that the quality of their master item data is the linchpin to optimal load packing, the sky can be the limit to automating packing solutions. With quality data and the right set of cartonization algorithms, the next step is to leverage more automation and robotics.
Indeed, the potential for robotics to pack boxes, pallets, containers, and truck trailers is unlimited. With the right data and software, robotic systems can transform the packing process, making it faster, more accurate, and less prone to human error. Now, this will take a lot of work to make it happen. Additionally, the robotic packaging systems will need appropriate human oversight and exception handling to maximize throughput and minimize downtime. For more discussion on robotic packing, see Modern Materials Handling’s article, Robots edge into packaging.
For more from SC Tech Insights, see the latest articles on Shipping and Information Technology.
Greetings! As an independent supply chain tech advisor with 30+ years of hands-on experience, I take great pleasure in providing actionable insights and solutions to logistics leaders. My focus is to drive transformation within the logistics industry by leveraging emerging LogTech, applying data-centric solutions, and increasing interoperability within supply chains. I have a wide range of experience to include successfully leading the development of 100s of innovative software solutions across supply chains and delivering business intelligence (BI) solutions to 1,000s of shippers. Click here for more info.