Amazon Eyes Boxes in Effort to Cut Shipping Costs

Aiming to reduce costs and lower the environmental impact of cardboard boxes, Amazon.com Inc. (AMZN) is being more thoughtful when shipping the millions of products this holiday season, trying to reduce the number of boxes that are delivered to customers’ homes.

According to The Wall Street Journal the effort on the part of the nation’s largest online retailer includes swapping out boxes for bubble envelopes, overhauling algorithms to ensure the proper sized boxes are chosen and holding talks with product manufacturers to get them to make smaller packaging for online sales. Brent Nelson, senior manager of customer packaging experience at Amazon told the Journal the company is making progress in getting manufacturers to consider overhauling packages for internet sales.

“Almost universally, packaging designed for brick and mortar is oversized with expensive and redundant shipping features,” he said in the interview. Philips, maker of the Norelco OneBlade trimmer and shaver, is one manufacturer that has been listening. It developed special packaging for Amazon that is roughly 80% smaller in volume than the box required to ship the razor to a physical store. (See also: Amazon’s Next Step: Reduce Reliance on UPS, FedEx?)

Pushing the Envelope

This year Amazon also rolled out machines in its warehouses that make padded envelopes on demand to ship small items which in the past would have gone in Amazon’s smallest boxes. Kim Houchens, director of customer packaging experience at Amazon, told the Journal that close to half of all of its products fit in the new padded mailers. On the algorithm front, Houchens and her team have been working to enhance the algorithms that decide the size of the box and how many items should be packaged together for shipments. Using machine learning, the algorithms can test new packaging combinations. Houchens told the Journal that consumers, particularly the younger ones, are worried about the environmental impact of online orders. Having the right packaging can help build brand loyalty. Not to mention it can alleviate frustration on the part of consumers who aren’t happy to receive multiple boxes for one order. (See also: Amazon Prime's Growth is Slowing: Morgan Stanley.)

The moves on the part of Amazon come amid a huge increase in shopping done on the Seattle-based company's e-commerce website. MWPVL International Inc., the supply chain consultancy, told the Journal that shipments from Amazon in the U.S. could hit more than 1.2 billion this year, double the number of shipments five years ago.