Supply Chain Solutions No.45 – Maximise Seafreight Container Fill
Managing container fill is important in small and large organisations. Excellent purchase order planning, logistics and carton size working to pack sizes that maximise container fill, and warehousing racking is the key to maximising container space utilisation, improve lead-times, reduce handling and save cost.
Development of a carton size that works for the business is critical, but this will depend greatly on the product being shipped. Small apparel product like swimwear will need to be in small pack size carton, larger apparel product like down jackets will be in considerably larger size carton. The largest carton should be divisible by the width, and the height of the container, the medium and smaller sized cartons must be; half, quarter or eighth divisible of the largest carton so they are stackable.
Where a product is larger and may have several components, packaging needs to be developed in the development process that reduces the size as much as possible still ensuring where possible the height and width are divisible by the container width and height. For larger goods, this process is critical due to transportation cost impact on total cost of goods.
All cartons must use the correct grade cardboard which maybe 3 or 5 ply corrugated depending on the weight. Using ECT (Edge Crush Test) rating to determine the best card quality is one of the preferred methods for choice the right quality carton. Example 32 ECT is rated to a maximum load of 40lbs or 18kg.
Any cartons not packed correctly, that are bulging or when the carton quality is substandard should be rejected before by the quality team or freight company at CFS before cargo loading.
Having standard carton sizes and knowing carton fill quantity will make it easy to calculate the order CBM. This will enable order destination planning to maximise CBM fill rates across the various container sizes. Knowing container break even rates to be able to choose LCL or FCL is an important process although you should always strive for FCL to eliminate the CFS packing at the origin and again at the destination to save cost and lead-time.
Logistics teams need to manage the consolidation process to maximise container fill while ensuring into store delivery targets will be met. Planning shipments based on purchase order FOB, vessel sailings, maximising container fill and hitting delivery goals can be a juggling act, but it is a role that is critical to the business.
Once the list of purchase orders that are due to be shipped on a vessel have been planned, a container packing plan must be completed. The packing plan will calculate the percentage efficiency of the packing plan, group purchase orders and place purchase orders in order of importance or warehouse bin location from the rear of the container through to the front. Achieving an 85% or over percentage efficiency is consider excellent.
Two software packages that are suitable for container pack plans;
Cube IQ – http://magiclogic.com
If your organisation has a total sea freight spend of US$1 million, and you can improve container space utilisation by 5% due to carton size and container space planning you just saved US$50K. If you ship US$10 million, you just saved US$500K! By further managing consolidations and moving goods that don’t fit into the current vessel consolidation and moving it to the next consolidation, maintaining only high capacity fill container shipments you could easily save an additional 5%.
ID Global Concepts are experts in managing procurement and logistics operations with over 20 years’ experience. We can add value to your sourcing operation either through consultancy or management contract to ensure your business is using best practice process that is the right fit for your business and meets your value expectations.
Below are the retailer’s ID Global Concepts have delivered quality apparel and accessories to over the last ten years;
Macy’s, Urban, Sears, Marks & Spencer, Myer, Kmart US & Kmart Australia, Dunnes Stores, Debenhams Monsoon Accessorize, Asos, Witchery, Brown Sugar, RM Williams, Coles, Chloe, John Lewis, Disney, Next, Firetrap, Lonsdale, Postie, ASDA, Harris Scarf, River Island, Tesco, Woolworths, Walmart, Glassons, Babies’R’Us, New Look, Target US & Australia, Primark, David Jones, Best & Less, Sophie, Yakka, Top Shop, BHS, Burlington, BigW, Oasis, JayJays, Blue Illusion, Driza-Bone, Just Jeans, Volcom, House of Fraser, Pumpkin Patch, Suzanne Grae, Pelaco, Laura Ashley, Sportsgirl, Ted Baker, Truetex, TableEight, French Connection
If you would like to learn more or wish to discuss other supply chain opportunities, please email us at email@example.com.