Most of us love receiving packages, though we probably don’t think deeply about how someone delivers them. If they’re personal, we suspect a gift or something positive. In the HVACR world, it’s still good news if we send (or receive) one because it implies the conclusion to a business transaction, and somewhere down the road we can almost hear the ring of the cash register. Almost.
That’s because supply chain experts and packaging experts, both in and outside of the HVACR industry, remind us that the entire subject of packaging, however mundane on the surface, delivers a message every time we send something. The message? We’re saying that whether it’s personal or business, we want the correct item delivered, on time and undamaged. Failure to complete part of that shipping equation can begin to gnaw at the relationship between seller and customer. And if that equation doesn’t improve, relationships can deteriorate. In a recent study of primarily retail customers, one in 10 packages arrived damaged (see sidebar). That’s a lot of damage.
Whenever a package is damaged, whether it’s retail or B2B, even if the product is fine, questions arise, says Ty McMahan, vice president, content, StellaService, a company that rates online performance of e-commerce. If the box is torn or ripped or has a corner pushed in, it doesn’t necessarily relay confidence to the person or company that received it.
Taking a broader, strategic view of the packaging issue is Greg Toler, vice president, Supply Chain, at Gustave A. Larson.
He says damage occurs sometimes, but for the suppliers, it is only one of many areas they need to worry about with the supply chain. As long as they load their product onto a truck, they can essentially wash their hands of the responsibility. The problem is that while some damage might be blamed on the carrier, the supplier would seldom know that their packaging is insufficient or done improperly. This is particularly true of less-than-truckload (LTL) shipments, Toler says. It’s a mixed bag for wholesalers. Some suppliers are good at understanding how to package their products, while others fail to have a broader view of the circumstances that dictate the packaging. Some suppliers have good packaging for stacking in a warehouse, but it doesn’t work well in an LTL situation. He also is surprised at how different all the packaging is. “Everyone’s different,” he says. “None of the packaging from all these suppliers is the same. You would think that in today’s world you don’t have to be cutting edge, just be a quick follower [of what works].”
In a recent study by StellaService, one in 10 packages shipped were damaged.
StellaService, which measures and rates the customer service performance of online retailers, examined 3,200 packages and products for damage. Carriers in the study included UPS, the United States Postal Service and FedEx. While the study focused mostly on the retail market, the results are interesting to anyone that ships product.
Damaged Package Results by Carrier
In the StellaService study, 313 damaged packages and 16 products were damaged. This resulted in a total of 5 percent damages to packages or product.
While there were 19 retail-oriented companies in the study that had no damaged packages, one company that is in the HVACR market, Grainger, joined that elite group.
In interviews with four different supply and packaging experts, all agreed that while the hard data of packaging and costs are elusive, there is a sense that manufacturers skimp on shipping costs to save money. The philosophy is simple: “As long as the job gets done, why bother?”
However, Toler points to a strategic benefit of spending more now, for more savings later, while improving customer satisfaction. Larson invested in air-ride trailers versus the more common and less expensive spring-operated trailers, he says. The difference? The latter are more prone to the vibrations in transit, while an air-ride system provides a far better shock absorption system. Products in an air-ride system ride with a “bladder or blade” of compressed air. The trailer essentially rides on a cushion of air, and the shock reduction is significant.
Toler points to one large wholesaler who has numerous branches, all within a 200-mile radius. The issue of damage for them might be less significant than for the Larson Company, with 46 stores spread over 13 states, including some of the larger, less populated ones out west.
How can wholesalers improve their shipping success, reduce damage and maintain better quality control? Our experts suggest that you:
- Study your competition. They might be doing it better than you.
- Test if necessary for certain products more prone to damage in transit. Consider testing your own packages (or those of your supplier) if you experience damage too frequently, either with a specific packaging type or a product. According to StellarService, “Art.com has dropped oversized boxes off its facility’s second story to determine reliability and employs 3rd party testing to ensure that packages arrive safely and in good condition.”
- Take photos from every angle. The proverbial photo is worth a thousand words and can become invaluable if a dispute arises.
- Ask your shipping manager to evaluate your package requirements at least annually. See if any new products in the market would reduce costs or whether you should anticipate changes in shipping rules.
- Keep an eye on FedEx and UPS. “They’re changing the way they’re pricing their rate card,” says Emily Kolodner, senior research associate with StellaService. These two giant delivery services, beginning in January, will charge not only based on weight but also the dimensions of the box. “If you ship something light in a big box, it’s going to cost more,” she says.
- Document everything. It’s easy to point the finger at someone else, but a paper trail helps identify the culprit when a package is damaged, says Chris Orsini, owner of Specialty Packaging. Orsini also says you should segregate damaged packages (and potentially the goods inside) immediately. While you can rarely tell whether the product inside is actually damaged, the outside evidence can be compelling that you have a greater chance of product loss. This allows you to deal with it before it gets to the “final” customer.
No matter what your packaging, there IS a built-in advantage that hasn’t disappeared and won’t as long as we ship product: the insert. You can deliver a marketing message to your customer simply by inserting it into the package. You can also customize the insert for specific customer segments, from controls and tools to unitary systems. In one sense, it’s a marketer’s dream: You have a captive audience, and for that moment at least, you have no competitor sending a contrary message.