Sizing up your Shipments
Can shippers who determine for themselves the weight and dimensions of every shipment or load they tender save on freight charges? The short answer is maybe. A lot depends on the accuracy of the information that is gathered and how it is applied.
Traditionally, dimensioning systems have been used for various applications in the warehouse. For example, incoming products are routinely measured as they are received. Knowing how big a product is and how much it weighs allows for better utilization of storage space. It also helps with the slotting of products in picking areas. Managers need accurate dimensional data to make sure they’ve allocated enough room for a product to assure adequate stock—but not so much that it increases the distance between products within the pick zones.
But it also turns out that the same dimensional information collected for storing and slotting can be used in shipping applications. The experiences of two companies, Monoprice and Interline Brands, are testament to that.
NO MORE ‘FAT FINGER’ ERRORS
Monoprice is a direct-to-consumer retailer of electronic products. Its distribution center in Rancho Cucamonga, Calif., utilizes a CubiScan 125 dimensioning system manufactured by Quantronix Corp.
The CubiScan uses lasers to measure the length, width, and height of each product when it is first introduced into the facility. It also weighs each item as it is measured.
Before the arrival of the CubiScan, this process was painstakingly performed by hand, which took considerable effort with some 4,500 stock-keeping units (SKUs) typically on hand (and another 10,000 SKUs in the database).
“In the past, we often had errors, as a worker would sometimes ‘fat finger’ a manual entry,” says Erik Entrikin, operations manager for Monoprice. “Now, once we receive a container from overseas, we dimension and weigh every new SKU with the CubiScan to accurately plot our slotting.”
In addition to using the data for storing and slotting, Monoprice uses the information on each SKU to determine the best packaging for the item once an order is received. “We use the cubing information to find out what size of box or envelope will fit the product best,” says Entrikin.
Beyond that, Monoprice has found that it can use the weight and dimensional data it has already collected to achieve freight savings. In addition to using parcel and less-than-truckload (LTL) services, the retailer ships full truckloads from the Rancho Cucamonga DC. When workers go to load trucks, the weight and dimension information is used to determine how to best fill the truck.
That’s good business practice, says Chuck Clowdis, managing director for transportation advisory and consulting services at IHS Global Insight, an industry research and consulting firm. “You don’t want to leave holes in trailers,” he says. “The idea is to fill the trailer. The higher and tighter you can stack a trailer, the better. Tighter stacking can also reduce product damage.”
“Dimensioning helps you to better understand your freight,” adds David Ross, managing director and transportation analyst for investment firm Stifel, Nicolaus & Co. “Understanding your dimensions allows you to redesign packaging to save money. You can also build pallets in a different way to save space in the truck.”
A BETTER CUSTOMER EXPERIENCE
Another company that’s using cubing data for a variety of applications is Interline Brands, a Jacksonville, Fla.-based supplier of maintenance, repair, and operations products. These products, which include parts for janitorial and plumbing needs, HVAC equipment, and industrial tools, vary greatly in weight and size. Items are shipped from 54 warehouses in North America. Four large replenishment centers feed the warehouses, and six CubiScans perform dimensioning within the system.
“We capture sizes at receiving and use the information [in many different ways],” says Scott Lowther, Interline’s vendor compliance manager. These include slotting within the warehouses and determining other space needs in both new and existing facilities.
The dimensional data are also used for shipping. Although it relies on parcel and LTL service for shipments to customers, Interline has its own fleet of trucks to handle much of the hauling between its facilities.
“We want to ship as little air as possible, so filling the trucks to capacity is to our advantage and is most cost-effective,” says Lowther.
He adds that customers also want to know what their freight charges will be at the time of order. Lowther says that Interline will be using the data it captures on its products to roll out a new program in the first quarter of 2013 that will provide accurate freight charges, enhancing the overall customer experience.
“CubiScan provides very effective data, and utilizing it for multiple means as we are is essential for our business,” he says.
WORKING WITH CARRIERS
As valuable as weight and dimensional data may be for internal shipping purposes, the story doesn’t end there. Having accurate numbers can also prove helpful when shippers go to deal with for-hire LTL and parcel carriers.
One example would be a case involving a dispute over freight charges. “If there is a challenge on a shipping charge, we have full documentation on that product’s weight and dimensions,” says Entrikin of Monoprice. Such challenges, he adds, used to be more common when the company relied on manual measurements, but rarely occur now because the information supplied to carriers is much more accurate.
And then there’s the matter of building better relations with carriers. Although parcel carriers tend to be more exacting when it comes to a package’s weight and dimensions, LTL carriers often rely on data provided by the shipper to determine freight charges. That’s largely a matter of expedience: Most truckers are focused on keeping freight moving through the network and don’t want to slow down processes to weigh and measure freight.
“Carriers don’t have the time to dimension every load,” says Clowdis of IHS Global Insight. “But if they see something that looks funky, they weigh and inspect it.”
That’s where dimensioning data comes in. “If you have accurate info on your products, it just makes it easier for the carrier,” explains Michael Regan of TranzAct Technologies.
Ross of Stifel, Nicolaus & Co. adds that making life easier for the carrier can have a long-term payoff. “If the shipper has better info on its products, it may be able to get a better price and build a better relationship with the carrier,” he says.