Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
When Jack Ampuja gives a talk on packaging, he brings along a visual aid: a shipping carton he received that's big enough to hold its contents several times over. His point is one familiar to most logistics professionals: Businesses ship a lot of air, driving up costs in a number of ways.
Ampuja, who is president and CEO of the consultancy Supply Chain Optimizers, says more often than not, the problem is simply lack of awareness. Companies typically select packaging based on marketing or other considerations without giving much thought to the supply chain implications, he says. As a result, they end up using more packaging than they need, creating enormous waste and unnecessary expense. He advocates with some passion that logistics professionals should become more involved in decisions about the packages their companies use to ship freight.
Package selection has taken on added importance in recent years as carriers—particularly parcel carriers—have begun imposing dimensional weight rules. Under those rules, the size of a package that's over three cubic feet can matter more than the weight when it comes to determining the freight charge, especially if the shipment is not very dense. Shippers have learned the hard way—through chargebacks by carriers—that they'd better be as aware of package dimensions as they are of package weight.
But the dimensional weight issue is just part of the reason Ampuja urges logistics professionals to take more control of packaging. Cost enters into it too, he says. Packaging has significant effects on logistics costs well beyond the price of cartons and filler. For instance, it can have a big impact on transportation expenses. The more packages you can fit on a pallet, the more packages you can get in a truck, thereby reducing the number of trucks needed and the amount of fuel used—important issues from both a cost and a sustainability perspective.
Then there's the issue of damage in transit. Randy Neilson, vice president of Quantronix, maker of the Cubiscan line of dimensioning equipment, adds that tighter packaging also means less shifting of goods within cartons, which reduces the potential for product damage.
There may even be regulatory compliance considerations. André Johnson, CEO of FreightScan, a company that makes cargo dimensioning products for carriers and some shippers, tells of customers who have used the dimensional data to back up their dimensional weight shipping costs as part of their companies' Sarbanes-Oxley compliance. "Shippers have told us that their dim weight charges have been questioned by their compliance people," he says. "They want to know how [shipping] knows the charges are accurate, since they are attesting that they are true. This is how they know."
Some companies may even face business pressure to avoid wasteful packaging. Wal-Mart Stores Inc. has launched a "packaging scorecard" for suppliers as part of an initiative to reduce packaging across its global supply chain 5 percent by 2013, based on a 2008 baseline. Shippers are rated on several criteria, among them the ratio of the product to the package, cube utilization, and transportation—all issues directly related to the size of the box. Late last year, Wal-Mart said it will roll out the packaging scorecard across most of its markets worldwide by the end of this year.
Wal-Mart expects the initiative to take some $10 billion in costs out of its supply chain, including transportation savings, with most of that going to its suppliers. That might sound like an ambitious goal, but Ampuja thinks the Wal-Mart targets should actually be relatively easy to achieve. "They should blow through that," he says. "I think for most companies, there is at least a 10-percent opportunity."
Nothing to lose, much to gain
Ampuja's own experiences with packaging optimization attest to the savings potential. He cites one customer (a retailer whose identity he cannot disclose because of a confidentiality agreement) that realized big cost reductions just by revamping its lineup of shipping cartons. Based on the results of an analysis Supply Chain Optimizers conducted over its 16,000 SKUs, the retailer eliminated nine of its 16 box configurations, then added 12 more for a total of 19. Increasing the number of options might sound like a step in the wrong direction, but Ampuja says the move actually reduced the total number of cartons used by 5 percent. In addition, the client expects to see a 5-percent reduction in outbound shipping weight, a 7-percent reduction in dim weight, a 28-percent improvement in outbound-case cube utilization, a 21-percent reduction in corrugate, and a 41-percent reduction in filler material. The net result: a 5-percent reduction in overall freight costs.
That's just one example of the kind of savings that can be achieved through packaging optimization. Ampuja cites another customer, a company that recycles used auto parts, that parlayed a minor packaging change into a rate reduction. By redesigning the packaging for a single part, it was able to take its freight class from 250 to 150, resulting in a 40-percent reduction in rates.
Of course, it's not enough to simply conduct a packaging optimization analysis. Once you have the results in hand, you then have to do something with them. One option is to incorporate tools into the warehouse management system that ensure the right carton is used for each shipment. For example, Nielson of Quantronix suggests programming the system to determine the right carton based on the dimensions of the shipment and then convey those instructions to workers on the line.
Team effort
Ampuja does not argue that packaging should be solely the responsibility of logistics; he acknowledges that there are plenty of marketing, antitheft, and other considerations that factor into packaging decisions. But he believes it is critical that logistics get involved in packaging decisions early on. "I would love companies to see it as a team exercise," he says.
On the overall need for logistics professionals to give more thought to packaging, Ampuja borrows a quote from the famed bank robber Willy Sutton. Logistics managers should focus on packaging "because that's where the money is," he says.
Donald Trump has been clear that he plans to hit the ground running after his inauguration on January 20, launching ambitious plans that could have significant repercussions for global supply chains.
As Mark Baxa, CSCMP president and CEO, says in the executive forward to the white paper, the incoming Trump Administration and a majority Republican congress are “poised to reshape trade policies, regulatory frameworks, and the very fabric of how we approach global commerce.”
The paper is written by import/export expert Thomas Cook, managing director for Blue Tiger International, a U.S.-based supply chain management consulting company that focuses on international trade. Cook is the former CEO of American River International in New York and Apex Global Logistics Supply Chain Operation in Los Angeles and has written 19 books on global trade.
In the paper, Cook, of course, takes a close look at tariff implications and new trade deals, emphasizing that Trump will seek revisions that will favor U.S. businesses and encourage manufacturing to return to the U.S. The paper, however, also looks beyond global trade to addresses topics such as Trump’s tougher stance on immigration and the possibility of mass deportations, greater support of Israel in the Middle East, proposals for increased energy production and mining, and intent to end the war in the Ukraine.
In general, Cook believes that many of the administration’s new policies will be beneficial to the overall economy. He does warn, however, that some policies will be disruptive and add risk and cost to global supply chains.
In light of those risks and possible disruptions, Cook’s paper offers 14 recommendations. Some of which include:
Create a team responsible for studying the changes Trump will introduce when he takes office;
Attend trade shows and make connections with vendors, suppliers, and service providers who can help you navigate those changes;
Consider becoming C-TPAT (Customs-Trade Partnership Against Terrorism) certified to help mitigate potential import/export issues;
Adopt a risk management mindset and shift from focusing on lowest cost to best value for your spend;
Increase collaboration with internal and external partners;
Expect warehousing costs to rise in the short term as companies look to bring in foreign-made goods ahead of tariffs;
Expect greater scrutiny from U.S. Customs and Border Patrol of origin statements for imports in recognition of attempts by some Chinese manufacturers to evade U.S. import policies;
Reduce dependency on China for sourcing; and
Consider manufacturing and/or sourcing in the United States.
Cook advises readers to expect a loosening up of regulations and a reduction in government under Trump. He warns that while some world leaders will look to work with Trump, others will take more of a defiant stance. As a result, companies should expect to see retaliatory tariffs and duties on exports.
Cook concludes by offering advice to the incoming administration, including being sensitive to the effect retaliatory tariffs can have on American exports, working on federal debt reduction, and considering promoting free trade zones. He also proposes an ambitious water works program through the Army Corps of Engineers.
ReposiTrak, a global food traceability network operator, will partner with Upshop, a provider of store operations technology for food retailers, to create an end-to-end grocery traceability solution that reaches from the supply chain to the retail store, the firms said today.
The partnership creates a data connection between suppliers and the retail store. It works by integrating Salt Lake City-based ReposiTrak’s network of thousands of suppliers and their traceability shipment data with Austin, Texas-based Upshop’s network of more than 450 retailers and their retail stores.
That accomplishment is important because it will allow food sector trading partners to meet the U.S. FDA’s Food Safety Modernization Act Section 204d (FSMA 204) requirements that they must create and store complete traceability records for certain foods.
And according to ReposiTrak and Upshop, the traceability solution may also unlock potential business benefits. It could do that by creating margin and growth opportunities in stores by connecting supply chain data with store data, thus allowing users to optimize inventory, labor, and customer experience management automation.
"Traceability requires data from the supply chain and – importantly – confirmation at the retail store that the proper and accurate lot code data from each shipment has been captured when the product is received. The missing piece for us has been the supply chain data. ReposiTrak is the leader in capturing and managing supply chain data, starting at the suppliers. Together, we can deliver a single, comprehensive traceability solution," Mark Hawthorne, chief innovation and strategy officer at Upshop, said in a release.
"Once the data is flowing the benefits are compounding. Traceability data can be used to improve food safety, reduce invoice discrepancies, and identify ways to reduce waste and improve efficiencies throughout the store,” Hawthorne said.
Under FSMA 204, retailers are required by law to track Key Data Elements (KDEs) to the store-level for every shipment containing high-risk food items from the Food Traceability List (FTL). ReposiTrak and Upshop say that major industry retailers have made public commitments to traceability, announcing programs that require more traceability data for all food product on a faster timeline. The efforts of those retailers have activated the industry, motivating others to institute traceability programs now, ahead of the FDA’s enforcement deadline of January 20, 2026.
Online grocery technology provider Instacart is rolling out its “Caper Cart” AI-powered smart shopping trollies to a wide range of grocer networks across North America through partnerships with two point-of-sale (POS) providers, the San Francisco company said Monday.
Instacart announced the deals with DUMAC Business Systems, a POS solutions provider for independent grocery and convenience stores, and TRUNO Retail Technology Solutions, a provider that powers over 13,000 retail locations.
Terms of the deal were not disclosed.
According to Instacart, its Caper Carts transform the in-store shopping experience by letting customers automatically scan items as they shop, track spending for budget management, and access discounts directly on the cart. DUMAC and TRUNO will now provide a turnkey service, including Caper Cart referrals, implementation, maintenance, and ongoing technical support – creating a streamlined path for grocers to bring smart carts to their stores.
That rollout follows other recent expansions of Caper Cart rollouts, including a pilot now underway by Coles Supermarkets, a food and beverage retailer with more than 1,800 grocery and liquor stores throughout Australia.
Instacart’s core business is its e-commerce grocery platform, which is linked with more than 85,000 stores across North America on the Instacart Marketplace. To enable that service, the company employs approximately 600,000 Instacart shoppers who earn money by picking, packing, and delivering orders on their own flexible schedules.
The new partnerships now make it easier for grocers of all sizes to partner with Instacart, unlocking a modern shopping experience for their customers, according to a statement from Nick Nickitas, General Manager of Local Independent Grocery at Instacart.
In addition, the move also opens up opportunities to bring additional Instacart Connected Stores technologies to independent retailers – including FoodStorm and Carrot Tags – continuing to power innovation and growth opportunities for retailers across the grocery ecosystem, he said.
The autonomous forklift vendor Cyngn has raised $33 million in funding to accelerate its growth and proliferate sales of its industrial autonomous vehicles, the Menlo Park, California-based firm said today.
As a publicly traded company, Cyngn raised the money by selling company shares through the financial firm Aegis Capital in three rounds occurring in December. According to forms filed with the U.S. Securities and Exchange Commission (SEC), the move also required moves to reduce corporate spending for three months, including layoffs that reduced staff from approximately 80 people to approximately 60 people, temporarily suspended certain non-essential operations, and reduced or eliminated all discretionary expenses.
In the company’s view, autonomous vehicles are playing a critical role in transforming industrial operations by enhancing productivity and safety.
“This capital infusion strengthens our ability to fund operations, drive commercialization, and continue investing in groundbreaking autonomous vehicle technologies,” Lior Tal, chairman and CEO of Cyngn, said in a release. “With increasing demand for automation solutions, especially in the automotive, heavy machinery and logistics industries, this funding allows us to build on recent momentum, including our upcoming autonomous forklift launch and other strategic advancements.”
Editor's note:This article was revised on January 14 to include information from Cyngn on its finances.
Inclusive procurement practices can fuel economic growth and create jobs worldwide through increased partnerships with small and diverse suppliers, according to a study from the Illinois firm Supplier.io.
The firm’s “2024 Supplier Diversity Economic Impact Report” found that $168 billion spent directly with those suppliers generated a total economic impact of $303 billion. That analysis can help supplier diversity managers and chief procurement officers implement programs that grow diversity spend, improve supply chain competitiveness, and increase brand value, the firm said.
The companies featured in Supplier.io’s report collectively supported more than 710,000 direct jobs and contributed $60 billion in direct wages through their investments in small and diverse suppliers. According to the analysis, those purchases created a ripple effect, supporting over 1.4 million jobs and driving $105 billion in total income when factoring in direct, indirect, and induced economic impacts.
“At Supplier.io, we believe that empowering businesses with advanced supplier intelligence not only enhances their operational resilience but also significantly mitigates risks,” Aylin Basom, CEO of Supplier.io, said in a release. “Our platform provides critical insights that drive efficiency and innovation, enabling companies to find and invest in small and diverse suppliers. This approach helps build stronger, more reliable supply chains.”