UPS Inc. and packaging giant Sealed Air Corp. said they have teamed up to help shippers streamline their packaging processes and reduce shipping costs, a task that has taken on more importance in light of recent moves by UPS and rival FedEx Corp. to make it more costly to ship parcels that contain excess packaging.
As part of the partnership, announced yesterday, UPS' customers will gain access to package engineering intelligence through Sealed Air's "Packaging Application Centers," which provide design, testing, and packaging performance analysis at 27 global locations. Sealed Air will offer packaging systems and materials to UPS shippers through the Atlanta-based transport and logistics company's "Customer Technology Program" (CTP). The program connects small to mid-size businesses with a wide range of vendors, which will now be expanded to include packaging suppliers, the companies said.
UPS, FedEx, and other parcel delivery firms have pushed shippers for years to streamline their packaging processes in an effort to reduce surplus packaging that protects the goods. UPS and FedEx claim that bulky, high-cube parcels occupy a disproportionate amount of space aboard vans and truck-trailers. For this reason, the companies have expanded the universe of parcels that would be subject to pricing based on their dimensions, rather than on their actual weight, which is usually less expensive.
Despite those efforts, the carriers are still struggling with an increase in package cube, a problem that has been exacerbated by the explosive growth of e-commerce and the resulting increase in parcel traffic. In addition, as online ordering expands to include a broader range of products, carriers are straining to handle items like kayaks and ping-pong tables that their infrastructures were not designed for.
FedEx Ground, FedEx's ground-delivery unit that ships much of the company's domestic e-commerce orders, is close to running out of capacity, according to a person familiar with the matter.
According to market research company eMarketer, worldwide e-commerce sales will reach $1.92 trillion in 2016 and exceed $4 trillion by the end of 2020. A forecast released today by IT provider Pitney Bowes Corp. said parcel shipping volumes from 12 major countries, including the U.S., will grow 5 to 7 percent annually from 2016 to 2018, paced by growth in cross-border shipping.
"E-commerce is perhaps the most important consumer goods revolution of the last 15 years," said Jerome A. Peribere, president and CEO of Charlotte, N.C.-based Sealed Air, in a statement.
Sealed Air is perhaps best known for its 1960 invention of "Bubble Wrap" packaging.