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© C
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Goodbye cartons, hello polybags!
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About the presenter
• Tim Kraus – Manager of product management – Responsible for conveyor and sorters – 17 years of material handling experience
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Goodbye cartons, hello polybags! We will cover • Why e-commerce growth is pushing the industry toward polybags • Challenges in handling polybags in automated material handling systems • System-level and equipment considerations
What you will take away • Better understanding of the drivers and challenges of this trend • Six specific concepts to consider that deal with e-commerce shipping costs
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E-commerce growth
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Global e-commerce will increase 16.4% in 2017 with web sales accounting for 8.2% of total retail. 40% of worldwide internet users have bought products or goods online.
73% of internet users access the web through mobile devices.
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E-commerce shopping behavior
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Sour
ce: 2
016
UPS
Pul
se o
f the
Sho
pper
™
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What is DIM pricing?
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= 20.24 lb
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What is DIM pricing?
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$ by actual weight
$ by dimensional or actual weight, whichever is
larger
<3 cubic feet >3 cubic feet
Any size
$ by dimensional or actual weight, whichever is
larger
After 2015 Before 2015
Growth in small item home deliveries caused the biggest last-mile carriers to re-think their pricing strategy.
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What is DIM pricing?
• Assigns a theoretical weight based on the item size
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Source: ups.com
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DIM pricing example
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DIM weight = 20.24 lb DIM weight = 9.25 lb
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Dim Pricing – What is the impact?
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33%
67%
All Ground Shipments
Affected byDIM pricingchangeNot affected byDIM Pricing
5lb, >3’ square, >250 miles
2015 Increase
2014 Price
42%
Source: wsj.com Source: wsj.com
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Poll question #1
Has your organization made any specific changes to address the DIM pricing change?
– Yes – No
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Packaging types
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Carton
Bubble mailer
Polybag
L
W
H
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Packaging types
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For irregular-shaped items, the more “pliable” the packaging, the lower the DIM weight.
Carton Bubble mailer Polybag DIM weight
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Why such a big deal?
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Six trucks One truck
Less than one truck
Source: pac.com
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Growth in polybag use
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55% 40%
5%
Apparel / Accessories
89%
11%
Electronics / Media
Box / Cardboard
Polybag
Other
Source: stellaservice.com
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Growth in polybag use
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Source: stellaservice.com
67% 64% 63%
24% 27% 28%
20%
30%
40%
50%
60%
70%
1st Half 2014 2nd Half 2014 1st Half 2015
E-commerce Packaging Type
Box / Cardboard Polybag
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Poll question #2
What type of packaging do you use for e-commerce shipments? (answer all that apply)
– Cartons
– Bubble mailers
– Polybags
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Dealing with shipping cost increases
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1. Re-negotiate with carriers – Many consulting companies specialize in this
service
2. On-demand packaging solutions – Machines create cartons on-demand based on
optimal size
3. Cartonization software – Software which systematically tells packers the
optimal size to use based on SKU dimensions and available package sizes
4. Rate shopping software – Software which shops optimal carrier based on
size, weight, destination and negotiated rates
?
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Dealing with shipping cost increases
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5. Pre-sort at the fulfillment center
– By skipping shipping zones, online retailers can see dramatic shipping cost reductions from carriers
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Dealing with shipping cost increases
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• Without zone skipping
By retailer By carrier
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Dealing with shipping cost increases
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• With zone skipping
By retailer By carrier
With zone skipping Shipping costs
Delivery times
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6. Reduce packaging size – Ensure new systems can accommodate singulated polybag flow from
pack-out operations to shipping – Investigate opportunities to handle polybags with existing equipment
Dealing with shipping cost increases
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• Two common methods for automated polybag systems from pack-out through shipping
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Singulated flow
Bulk flow
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Pack-out Bulk flow transportation
Singulation
Sortation
Automated or
manual
Bulk flow system
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Pack-out Singulated accumulation
Merge Sortation
Singulated flow system
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Bulk flow with automated singulation
Bulk flow with manual singulation Singulated flow
Conveyor between pack-out and shipping Simple Simple More complex
Singulation process Complex Manual Not required
Item identification Six-sided One-sided One-sided
Throughput dependency Design Staffing level Design
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Physics!
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Polybag challenges
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Extra catch points
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Polybag challenges
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Detecting
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Polybag challenges
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Detecting
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Polybag challenges
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Identifying
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Polybag challenges
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Identifying
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Polybag challenges
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Identifying
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Polybag challenges
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Identifying
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Polybag challenges
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Identifying
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Polybag challenges
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Handling and sorting
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Polybag challenges
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Conveyor types and their ability to handle pliable materials
Conveyor
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Belt conveyor
3-inch roller center
2-inch roller center
Belted zones
Modular belt
Skatewheel
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Item
type
han
dlin
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pabi
lity
Small / difficult
to handle
Large cartons or totes
Belt conveyor
3-inch roller center
2-inch roller center
Belted zones
Modular belt Skatewheel
Transportation conveyor
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Item
type
han
dlin
g ca
pabi
lity
Small / difficult
to handle
Large cartons or totes
Belt conveyor
3-inch roller center
2-inch roller center
Belted zones
Modular belt Skatewheel
Accumulation conveyor
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Sorter types and their ability to handle pliable materials
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Manual process
Pusher MDR transfer / divert
Strip belt transfer / diverts
Sweep sorter
Tilt tray
Cross belt
Articulated roller belt
Bomb bay
Pop-up wheel divert
Sliding shoe
Sortation
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Item
type
han
dlin
g ca
pabi
lity
Small / difficult
to handle
Large cartons or totes Manual
process Pusher MDR
transfer / divert
Pop-up wheel belt
Strip belt transfer /
divert
Sweeper sort
Sliding shoe
Tilt tray
Cross belt
Articulated roller belt
Bomb bay
Sortation
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Q & A
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