See how smarter, more space-efficient packaging is helping Horizon Spa & Pool Parts save on shipping costs.
When dimensional weight pricing for ground shipments went into effect in January 2015, Horizon Spa & Pool Parts owner Ralph Raub knew he needed to find a solution to combat the extra costs incurred by unnecessary wasted space and "fluff" filler in his shipments.
WorldShip cut Horizon Pool & Spa's shipping time by 10 seconds per order, saving an estimated $3,300 annually while speeding up processing time, reducing extra shipping lines and freeing up $5,000 worth of warehouse space.
This pricing structure, where shippers pay for the space the package takes up in the truck or its actual weight (whichever is greater), meant that Horizon's 400 to 800 daily shipments – regardless of their actual weight – could end up costing him and his customers more to ship. This led Raub to seek alternative and unique packaging optimization solutions.
"We were using a lot of blowup pillows in our shipments, and our customers continually complained about freight cost, so we wanted to see if it would make sense to make our own boxes," Raub says.
In an effort to eliminate unnecessary air and reimagine sizing techniques, Raub called upon UPS to help the wholesale pool parts distributor in Tucson, Ariz., build better, one-of-a-kind boxes.
Designing sleek solutions
Raub's first step was to invest in CubiScan, a technology that measures and weighs each of the 30,000 parts his company ships out. With that information stored, Horizon could best match shipping boxes to products.
Next, he turned to Packsize. This on-site system calculates an order's volume and weight measurements to create a custom box for shipping. "With Packsize, we minimize or eliminate airspace," Raub explains. He estimates that Horizon has cut back on box filler by 75 percent, and the smaller boxes mean his customers have seen their shipping costs drop.
Following CubiScan and Packsize's initial success, it didn't take long for the tools' cost-cutting benefits to gain traction with neighboring businesses. Horizon worked with one manufacturer to box its large, lightweight filter canisters with other parts instead of individually. Following the switch, the company was able to obtain bulk product at cheaper rates and cut outbound shipping costs by sending the complete orders out in smaller containers.
In addition to reimagining its packaging strategy, Horizon wanted to streamline its shipping solutions, too. An interim first step – a switch from a third-party solution to UPS WorldShip® – eliminated the $3,600 in technical support fees and $5,000 in annual fees Horizon was paying.
WorldShip cut shipping time by 10 seconds per order, saving an estimated $3,300 annually and speeding up processing time. This allowed Horizon to drop down from four shipping lines to two, freeing up $5,000 worth of warehouse space.
Next, Horizon switched from WorldShip to ConnectShip® software that streamlines order/fulfillment processes and is used by 20 percent of Fortune 500 companies. With that, Horizon's productivity expanded even further. "With ConnectShip we really don't need any shipping stations," Raub says. "We have a paperless warehouse, and when orders come in we scan and pick 20 to 30 at a time. The machine makes the box while we're picking the merchandise, and when it comes out of the warehouse the label is printed and put on the box." He estimates that the additional efficiencies save his company 40 hours of work per week.
In addition, Horizon had been shipping most orders via two-day air. ConnectShip helped the company identify all Zip Codes that could be reached from Tucson via UPS Ground within two days, saving an additional $6,000.
While prices for corrugated material are best by the full truckload, the company doesn't currently have enough warehouse storage space for that volume, Raub says. However, Horizon is always looking for ways to trim expenses and hopes to partner with another Tucson-based company to buy cardboard in bulk for its Packsize boxes and boost savings even further.