The Dunnage Balancing Act

Sep 01, 2004 9:30 PM  By

Using too much dunnage is a waste of money, of course. But skimping on packaging materials can be costly as well: Too many orders will be arriving to customers — and coming back to you — damaged.

Fort Worth, TX-based home decor cataloger/retailer The Bombay Co. earlier this year realized that its damaged-goods reshipment rate of 3%-5% was impinging on profitability, says director of distribution Jeff Ritacco. So this past May, The Bombay Co. began a dunnage makeover that it hopes will lower its reshipment rate due to damage to less than 1% and reduce costs.

For starters, the company reviewed its packaging processes and found it often used bigger boxes — and consequently more dunnage — than necessary. As Ritacco puts it, “We were sending a lot of air.” Accessories such as pen holders and small clocks were being shipped in boxes measuring 6″ × 6″ × 6″. By switching to envelope mailers padded with bubble wrap for these items, the company saved on dunnage and reduced the mailing weight. Ritacco believes this will save at least 10% in costs. What’s more, productivity gets a boost, since packers don’t have to create and pack boxes for the items.

For textiles such as bedding, the company switched from boxes to pliable heavy-duty plastic bags. “You can wrap it around the product to its exact size, and it’s self-adhesive,” Ritacco explains. “It’s a tough plastic, so it can handle being shipped and tossed around.”

Enough’s enough

Overpackaging is the key dunnage mistake that companies make, says Steve Sobel, national product manager for Cincinnati-based packaging supplies manufacturer Storopack. “I am convinced that 75%-95% of everything shipped can go in a plastic bag and be fine,” he says.

Sobel recommends that catalogers “package to the zone” — using only as much dunnage as is necessary depending on how far the package is traveling. The farther a package has to go, the greater its chances of being damaged.

You can also ask vendors to deliver products in shipment-friendly packages. Suppliers have become more receptive to this need in recent years, Sobel says, and even overseas vendors are beginning to package products in a more durable manner.

“Products from Asia used to come in bulk, cheap packaging, so a lot of distribution centers had to break out the packages, and repack,” Sobel points out. “Now, as Asia has become more user-friendly, products are supplied in cushioned, finished packages.” Adequately packaged products often need only a “void fill” such as a few Styrofoam peanuts for rattle control.

The right dunnage for the job

Doraville, GA-based dollhouse supplies cataloger Hobby Builders Supply, which also operates the Miniatures.com Website, saves money on dunnage by purchasing unused rolls of printing paper from a newspaper publishing plant, says operations manager Leta Reynolds. The dunnage, which costs a few cents per package shipped, “doesn’t add that much weight to packages,” she says. The company uses the paper to stuff the boxes carrying accessories such as miniature tea sets that are first wrapped in bubble wrap; slightly less fragile items, such as dollhouse furniture, are placed in a bed of Styrofoam peanuts.

Reynolds, who used to work for home decor cataloger Ballard Designs, says that printers can be a great source for dunnage. At Ballard, she used to get the cardboard cores for shipping posters from a printing company. The printer amassed the cores while running paper through its presses and was happy to give them away — until it realized it could charge for them. Even once the printer started charging for the cores, though, they were still a good deal at about $0.45-$0.65 per 1,000.

Sometimes it pays to spend a little more on packaging rather than to go with the cheapest option, if the more costly material will better prevent damage. To better protect highly breakable products such as decorative china, Bombay Co. switched from bubble wrap on top of a bed of air pillows to foam that wraps around products. The company buys the dunnage from Saddle Brook, NJ-based Sealed Air Corp.

Ritacco could not say how much the switch to foam is costing the company. But he says that even if the cost per package increases as much as $2, the expense will be well worth it. Say a $30 product that costs $5 to be shipped arrives to the customer damaged and is returned to the cataloger. Ritacco points out that the company will have lost $60: $30 for the damaged product and $30 for the replacement product. And the company typically pays to have the damaged item shipped back, then would have to pay another $5 to reship the new item to the customer. “Plus there’s the productivity to pick and pack,” Ritacco says, “and the loss of goodwill of the customer. We may lose another sale in the future.”