Think Out of the Package: Recommending Package Types for E-Commerce Shipments

Abstract

Multiple product attributes like dimensions, weight, fragility, liquid content etc. determine the package type used by e-commerce companies to ship products. Sub-optimal package types lead to damaged shipments, incurring huge damage related costs and adversely impacting the company's reputation for safe delivery. Items can be shipped in more protective packages to reduce damage costs, however this increases the shipment costs due to expensive packaging and higher transportation costs. In this work, we propose a multi-stage approach that trades-off between shipment and damage costs for each product, and accurately assigns the optimal package type using a scalable, computationally efficient linear time algorithm. A simple binary search algorithm is presented to find the hyper-parameter that balances between the shipment and damage costs. Our approach when applied to choosing package type for Amazon shipments, leads to significant cost savings of tens of millions of dollars in emerging marketplaces, by decreasing both the overall shipment cost and the number of in-transit damages. Our algorithm is live and deployed in the production system where, package types for more than 130, 000 products have been modified based on the model's recommendation, realizing a reduction in damage rate of 24%.

Product Packaging by E-commerce Platforms: Impact of COVID-19 and Proposal for Circular Model to Reduce the Demand of Virgin Packaging

“…E-commerce companies enwrap their products in multiple layers of (excessive) packaging materials to ensure health and safety conditions as well as increase the aesthetic nature of their product [ 2 , 9 – 10 , 14 ]. As displayed in Fig.…”

“…The COVID-19 pandemic has thus led to an increase in society's dependence on the e-commerce market for a variety of products ranging from groceries to fashion, and even furniture, electronics, and household products. E-commerce companies enwrap their products in multiple layers of (excessive) packaging materials to ensure health and safety conditions as well as increase the aesthetic nature of their product [2,[9][10]14]. As displayed in Fig.…”

“…D. Increased customer loyalty: With the option of returning packaging at the time of the next delivery, customers are more likely to choose that particular e-commerce platform for subsequent orders. E. Attract environmentally conscious customers: Customers who care about the environment are more likely to order from e-commerce companies adopting such models [5,9,14,[34][35][36].…”

“…The utilisation of packaging has seen an evident increase due to its three-fold function: aesthetic and appealing nature; health, hygiene, and safety; and preventing damage to the product during the multiple levels of manual handling [ 2 , 9 ]– 10 . A single parcel sometimes can use up to 7 different types of packaging materials such as envelopes, cardboard, plastic bags, woven bags, tape, buffer material, and paper waybills [ 6 ].…”

The Impact of Supply Chain Information System on The Digital Economics and logistics transportation

“…The advantage of running an online business through the marketplace is that it has greater opportunities through the community, there is no need to lose consumers because every day the online sales platform is visited by millions of people, the business will automatically be promoted by the online marketplace owner so there is no need for expensive or complicated promotional tools to market products [32]. Online marketplace companies usually have features or regulations that can increase credibility and also store security, some integrated online marketplaces usually apply rental fees but not as much as renting places such as shop houses or fields, there are even some free online marketplaces such as Facebook groups, forums buying and selling online, you don't need any fees at all, can monitor business developments, can evaluate products, marketing strategies, or even know the effectiveness and performance of online marketplace managers [33].…”