e-Commerce has ignited the home delivery boom. The sheer volume of parcels being delivered has skyrocketed—with Australia Post delivering 447 million parcels in FY241 alone. This growth means that freight costs have begun to swell but for a very misunderstood reason.
The physical weight of a parcel, also known as the actual weight, or dead weight, has been affected by a general increase in postage costs. Since shipping fees can make or break checkout conversions, relying solely on dead weight isn’t always a logical way to calculate postage costs.
An alternative and more common way for freight companies to calculate freight costs is to charge based on the size of the package and how much room it occupies in their vehicles, this is known as dimensional weight, or cubic weight. More and more freight companies are moving towards charging whichever is greater out of the calculated dead or the cubic weight.
Cubic weight is calculated using the packages cubic volume, which is determined by the parcels dimensions, multiplied by a cubic conversion factor (generally 250kg per cubic metre). This provides the chargeable weight and considers the space needed to transport the package.
The problem with this method
Often, the cubic weight calculation results in a higher rate, therefore, is used to determine the postage costs. I’m sure you have received a parcel, gone to open the box, only to find it oversized, crammed-full of plastic or paper-based void fill. When a package is calculated using cubic weight, it includes a cost to ship that empty space.
How to make DIM weight work for you
How can you use the cubic weight calculation to your advantage? The answer is simple: use right size boxes with measurements as close to the product dimensions as possible. This can, however, be difficult when using ready-made boxes.
Do more with less
The solution is using automated right-sized packaging technology that creates custom-sized boxes on demand. It is far simpler than it sounds, and this is where Abbe can help.
At Abbe, we represent a range of cutting-edge, 3D packaging automation solutions. These turnkey systems provide end-to-end packaging solutions tailored to your needs and budget. The unique format and design of our 3D packaging solutions can reduce cardboard consumption by up to 41% compared with traditional packaging (stock size cartons). And our cardboard is a highly recyclable and sustainable packaging product, reducing potential landfill is still more environmentally friendly.
What’s more, this technology has a major environmental advantage, enabling a reduction in CO2 emissions. It allows for increases in transport and truck loading efficiencies with more packages per truck due to the right-size packaging format, which in turn requiring fewer trucks on the road and reducing the overall CO2 emissions used. This has a compounding advantage for line haul (state-to-state) and last-mile deliveries.
Bottom-line savings
Many distribution centres for retail and e-Commerce are embracing these advanced technologies. At Abbe, we collaborate closely with our customers to conduct before-and-after optimisation analyses of their packaging process. This helps identify potential benefits and cost savings achievable through the implementation of right-size packaging.
Partnering with a market-leading e-commerce business, we implemented a CMC 3D automation solution that delivered significant benefits. Installing a CMC machine increased their end-of-line capacity and reduced cubing—measuring item size and weight to optimise storage space and inventory placement—by an average of 36%. A result that speaks for itself in cost and space efficiency.
To learn more about these 3D packaging automation solutions, or to enquire about your own optimisation analysis, reach out to our Abbe Automation team here or visit our page on Packaging Machinery: here
References:
1Australia Post financial year 2024 Annual Report.