Goodbye cartons, hello polybags! - Intelligrated · E-commerce growth 4 Global e-commerce will increase 16.4% in 2017 with web sales accounting for 8.2% of total retail. 40% of worldwide

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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?

6

= 20.24 lb

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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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• 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

?

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.packsize.com/on-demand&ei=4TatVLfyMIauyAS2woLgAg&bvm=bv.83134100,d.aWw&psig=AFQjCNGx8hyBGKkUlwDPhNofzI-t7tOASg&ust=1420724172227516

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.sparefoot.com/storage-tips/negotiating-storage-rates/&ei=UjetVJSQNIa6yQS8oIGwDA&bvm=bv.83134100,d.aWw&psig=AFQjCNGqumhR-zSs3PhWSd-8vw3hkSZUfQ&ust=1420724390829333

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://sheblogscouture.com/2013/08/16/move-it-in-style/&ei=DjmtVPCKE8SSyASm7YGYBw&bvm=bv.83134100,d.aWw&psig=AFQjCNEbDUmK3UYZqVfQ3XOddX3sObICmA&ust=1420724826875806

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.busybantams.co.uk/Hybrids(2650046).htm&ei=JjmtVPmTI4yXyATZloHYAQ&bvm=bv.83134100,d.aWw&psig=AFQjCNEbDUmK3UYZqVfQ3XOddX3sObICmA&ust=1420724826875806

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://prosoundgear.com/shipping-returns/&ei=azqtVJOFI8uMyATMl4HIDA&bvm=bv.83134100,d.aWw&psig=AFQjCNHuNdEc59fkfxCXUux78Y3yONiIKg&ust=1420725198229728

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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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• Without zone skipping

By retailer By carrier

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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


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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

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://intralogistics.fivesgroup.com/solutions-products/products/singulators/linear-parcel-singulator.html&ei=NmysVOeULoS1yQT2hIHICg&bvm=bv.83134100,d.aWw&psig=AFQjCNFY2bLWObk9s5zHfVqH2xEuIXMiiQ&ust=1420672353356056

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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


Belted zones

Modular belt

Skatewheel

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Item

type

han

dlin

g ca

pabi

lity

Small / difficult

to handle

Large cartons or totes

Belt conveyor



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



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

Documents

Goodbye cartons, hello polybags! - Intelligrated · E-commerce growth 4 Global e-commerce will increase 16.4% in 2017 with web sales accounting for 8.2% of total retail. 40% of worldwide