Small Parcels, Big Challenges : The Supply Chain & Small Parcel Shipping

Small parcel shipping plays an important role in D2C delivery due to the increasing popularity of e-commerce. When shopping online consumers are most often buying more compact, lightweight items (under 150 pounds) which fall into the small parcel category. Because this industry grew so quickly many businesses are scrambling to meet the special handling and transportation requirements needed to efficiently and cost effectively get products to consumers. Many retailers and manufacturers face problems when transporting these small packages due to the unsuitability of their existing LTL transportation providers. Most often these LTL providers handle full pallet loads rather than less than pallet load shipments (LPL). In an effort to fill their trailers to capacity LTL providers often break up LPLs to fill empty space. This increases the likelihood of damage during transit that is less likely to occur with full pallet loads. Shipping small parcels is often more expensive because shippers are not able to take advantage of economies of scale as they would with full pallet loads. These costs must either be recouped somewhere else or passed on to consumers through higher shipping rates. Labor within the fulfillment center has also presented a challenge to distribution centers, warehouses and 3PLs. Small parcel processing requires more labor per unit than bulk shipments which means even more cost must be absorbed or passed onto the consumers. Dimensional weight pricing has also posed a problem for businesses handling small parcels. Many businesses are implementing cartonization solutions to improve packaging selection in order to reduce both packaging costs and transportation costs. In addition to these top cost related challenges, many small parcel shippers also struggle with managing the customer experience, efficient route planning and avoiding freight accessorials. To learn more about how small parcel shippers are addressing these challenges read this brief SlideShare or contact Datex today at marketing@datexcorp.com or 800.933.2839 ext 243.