Damage Control

Jul 01, 2004 9:30 PM  By

Companies that ship products directly to consumers have a problem that conventional retailers don’t necessarily have to consider: Their goods must withstand considerable punishment in a harsh transportation environment. Boxes packed in cases, shrink-wrapped on pallets, and moving by the truckload tend to suffer less damage than individual parcels moving through a less-than-truckload network.

No available figures document the damage sustained in direct-to-consumer deliveries, but here’s a hint: In 2002, grocery manufacturers lost nearly 1% of their sales, or over $1.5 billion, due to product damage, according to the Grocery Manufacturers Association. The percentages have to be a lot higher for home deliveries, according to Daniel Bolger of The Bolger Group, a logistics consultancy in Millersport, OH. “It’s a much more difficult transportation environment,” he says. “Grocery manufacturers operate in a dock-to-dock type of environment.” And while shipping damage in conventional retail supply chains is handled in the normal course of business, direct merchants are likely to forfeit customer goodwill if they deliver damaged goods.

For shippers of books, CDs, or even apparel, consigning a standard box to a UPS or a FedEx sounds like a fairly low-risk M.O. But for shippers of high-value or oddly shaped merchandise, some smart strategizing is in order.

  1. Pay attention to packaging

    “Direct-to-consumer products need considerably more protection than goods that are bulk-distributed,” says Ben Miyares, a packaging expert and publisher of a newsletter for the Packaging Machinery Manufacturers Institute.

    That may seem like common sense, but Gene Bodenheimer, executive vice president of Winston-Salem, NC-based Universal Solutions International Inc., a firm that advises shippers and carriers on reducing logistics damage, warns that “common sense doesn’t always seem to be applied” when it comes to packaging for home deliveries.

    “Just using effective void fillers reduces product movement during transit and a lot of the potential for damage to occur,” Bodenheimer says. Bolger adds that reinforcing the outside of a box with corner guards and stretch wrap adds vertical strength that allows an item to resist the application of a vertical load.

    Bodenheimer advises shippers to develop a better understanding of the stresses their products must sustain by actually observing product movements in a less-than-truckload or small package environment. In addition, each product ought to be individually analyzed, he says.

    Appliances such as washers, dryers, and stoves “will have a nice cube to a degree,” Bodenheimer says, but, he cautions, “the control panel usually sticks out, and that leaves a void in the box. The best thing to do is to analyze where the product is vulnerable and to use more robust protective packaging in that area. You can’t afford stainless steel, but you have to balance reason and economics.”

  2. Choose your carrier wisely

    The big less-than-truckload carriers don’t operate with the delicacy required for home deliveries of consumer goods, according to Bolger. However, a growing number of specialty carriers are springing up to meet the needs of direct merchants.

    One such carrier, MGM Transport of High Point, NC, provides furniture manufacturers with home deliveries through a network of specialized home delivery centers. “Multiple handling between the manufacturer and the home is what makes home deliveries more dangerous,” explains John Donahue, MGM’s vice president and general manager. “We reduce product handling by directing the piece from the first consolidation point directly to a home delivery center.”

    Home delivery centers are specialized delivery environments that prepare the merchandise for delivery to the consumer. “A retail customer in a store or on the Web is looking at a naked piece of prepped furniture,” Donahue says. “That is what we present to the customer when the delivery is made at home.”

    MGM does this first by removing the furniture from its original packaging, then fully inspecting, preparing, and assembling the piece, and finally repackaging it in special home delivery materials such as extra-soft cheesecloth and thin plastic bags. “We also use furniture pads to protect and wrap the piece, and we specially load it on a truck that goes directly to the home,” Donahue says.

    He adds that other specialized carriers are cropping up, including some that specialize in the home delivery of such products as electronics, white goods, and exercise equipment.

  3. Consider product redesigns

    The structure of a product can itself strengthen the integrity of its packaging in a shipping environment. In other words, products that are meant to be home-delivered ought to be designed for it, say the experts.

    “It’s a good idea to analyze what the product itself lends to the exterior package in a shipping environment,” Bodenheimer says. For example, a chair may be perfectly fit for its intended use — supporting the weight of a person sitting on it. But if that same chair is going to fall apart in transit, it may be necessary to strengthen the chair’s design.

    Bolger agrees that if circumstances warrant, “product redesign can help [a product] withstand the problems encountered in the normal course of shipping.” In other words, it may pay to apply some preemptive tactical expertise during the design stage of a product to supplement the long-term strategy of avoiding problems. “If damage typically occurs on the back of the chair, it may be necessary to add some strength there,” Bodenheimer says. “You might also need to consider using stronger fabrics for items that are home-delivered.”

  4. Watch future technologies

    Radio frequency identification technologies are most commonly associated these days with programs initiated by such major users as Wal-Mart and the Defense Department to promote supply chain visibility and product tracking. But there is a lot more potential in the technology than that, according to Ben Miyares.

A paper published in 2003 by the Institute of Packaging Professionals notes that microelectromechanical devices could in the future “tell small parcel shippers when and where impact limits on packages have been exceeded.”

RFID works by applying tags that store data and emit radio frequency signals to boxes, crates, pallets, and containers. Inexpensive passive tags sit dormant until interrogated by a reader. More expensive active tags send out data proactively on a recurring basis and can be monitored in real time by GPS satellites.

Currently available technology would allow RFID tags to be embedded with sensors that monitor and report on environmental dangers to packages, according to Miyares. For example, tags can be programmed to detect vibration or moisture and to report the time and location of any mishap. “Intelligent packaging could actually help prevent damage, because the handler will know that he will be held responsible in the case of damage,” Miyares says.

It would also alert the shipper to any problems in near-real time, allow the shipper to have the package inspected and, perhaps, even to expedite a replacement to the customer, thus preserving goodwill.

Miyares believes that passive RFID technology could be cost-effectively applied to many home-delivery scenarios. “The passive tags cost about 40 cents,” he says. “What is still required is for UPS, FedEx, and other carriers to set up portals through which to pass the packages so that the RFID tags can be read. That is being worked on now.”

For expensive merchandise such as electronic equipment, artwork, or jewelry, Miyares believes shippers could sell their customers on the idea of paying a few extra dollars to apply a more expensive active RFID tag. “It’s a matter of offering the customer an extra option,” he says. “Call it ‘digital protection.’”

Peter A. Buxbaum writes about business and technology for such magazines as Fortune, Computerworld, and Information Week.