Learn why it’s important for shippers to package products correctly to avoid freight damage.
What’s in this article:
What do companies have to gain by properly packaging their freight?
The cost of freight damage
The negative effect freight damage can have on your brand
Proper Packaging Prevents Freight Damage
Shippers themselves are the first line of defense in protecting products from damage. Careful, thoughtful, packaging helps products arrive at their destination intact and unscathed; the same as when it left the shipper’s building.
Here’s why it’s important for shippers to make sure their products are well packaged and what can happen if they don’t.
What do companies have to gain by properly packaging products for shipment?
Some estimates show that the average e-commerce package is dropped 17 times before it reaches its destination. Packaging protects the product from damage due to impact, and it also may help protect the product from the elements. This helps ensure it gets to the customers damage-free.
When a package arrives on time and intact, your end-user is getting the experience that you intended them to have.
When a package arrives on time and intact, your end-user is getting the experience that you intended them to have. They see that you’re reliable, they see the branding that you wanted them to see, and they have the experience you intended.
A lot of effort goes into manufacturing or importing products and designing packaging, all ultimately important to the end-user experience. Making sure those end-users get the full effect can often be accomplished through appropriate packaging.
What do companies have to lose?
Bottom line, damaged freight costs a company money. Many estimates show that companies write off around 10% of shipments each year due to damage and freight claims. The National Cargo Security Council (NASC) projects that the global cost of cargo loss per year stacks up to around $50 billion.
Aside from the instant financial hit that comes with damaged freight, a bad customer experience or a bad end-user experience can have a more lasting effect. In a world where everything can be reviewed, many people don’t bother to leave a review unless they had a bad experience, and people take those reviews at face value, meaning even one damaged package can tarnish a company’s reputation. They may choose to use one of your competitors next time around, and they may tell all their friends or followers to do the same.
How your package looks when it arrives reflects on your brand, and it’s a critical part of customer experience that can’t be ignored.
It Goes Beyond the Cost of Freight Damage
Obviously, damaged freight costs companies’ money. They must replace the product or give the customer a refund. However, even if the damage is covered by freight insurance, the company still has a lot to lose when a product arrives damaged.
Freight Damage Claims are Not Just Expensive; They’re Time Consuming
“But we insured our freight!” might be the party-line when it comes to packaging, and that’s true. Oftentimes, damaged freight is covered by insurance. The money received from claims doesn’t account for all the damage done, though.
Freight claims take time. They require expertise.
Freight claims take time. They require expertise. They use up company resources and sometimes, they’re denied even after all the time and effort that goes into filing them and managing claims throughout the process.
Freight Damage Returns are Expensive, Too
Say a customer returns a damaged product and the company sends them a new one, oftentimes at no cost to the customers because that’s what customers expect in today’s market. That return likely costs the company far more than the customer paid for the product.
Retail analyst Paula Rosenblum with RSR Research says that retailers lose up to one-third of their revenue to returns. If they’re processing them in-house, it absorbs time, space, and other resources. If like many small companies, they’re contracting out returns processing, they’re dedicating a portion of their budget to not having to deal with them.
Negative Effect on Brand Image
It’s easy to look at how much a damaged package costs in the near term, but not as easy to measure how much negative impact that damage has on the company’s brand image. We know that packaging design has an effect on brand image and how people see a company.
When that packaging is damaged, the customer is bound to not feel as warm and fuzzy about the company that was responsible for sending it to them. Digging into that, they may opt not to buy from you next time or spread the word that they had a bad experience.
It’s a Safety Issue
Improperly packaged goods pose a potential safety risk to everyone who encounters them. From warehouse workers to truck drivers to store employees to the end customer, a damaged package has the potential to do harm.
Products that aren’t well-packaged can become a target for theft, as well. Especially in LTL where a pallet of goods may have several stops before it gets to its end destination, exposed product is an unnecessary temptation for would-be thieves.
Getting Packaging Right the First Time is Sustainable
Returns aren’t just hard on the bottom line; they’re hard on the environment, too.
Returns aren’t just hard on the bottom line; they’re hard on the environment, too. The transportation to return the product, the carbon emissions required to make another product to replace the damaged one, the space it takes up in a landfill, or the emissions created through destroying damaged product through other methods, these sustainability issues pile up quickly.
Proper packaging can prevent damaged product and cut down on returns, reducing the environmental impact of doing business.
It hasn’t escaped the notice of anyone in the supply chain that trucking capacity is tight right now. There is far more freight than there are trucks. Shippers are under more pressure than ever to make life easy for carriers. Being a preferred shipper is important, and if your packaging is lacking carriers won’t want to take your freight altogether, or they could charge higher rates.