Establishing Packaging Designs To Increase Processing Efficiency Of E-commerce Parcels And Packets

Background

Machinables and Non-machinables

Today at SingPost, packages are first segregated into “machinable” and “non-machinable” categories.  “Non-machinable” packages are those that are unable to be processed automatically by machines that perform barcode/address reading, weighing, dimensioning and processing.

Usual reasons for a package being non-machinable are odd sizes, poorly located or unreadable barcodes/addresses, odd shapes, and low quality or extremely flimsy packaging like a loose plastic bag that does not expose the barcode or address label.

We are now looking for participants to help us solve the highlighted segments.

Impact to processing

These non-machinable packages would then have to be processed via manual labour from start to end, which is not cost efficient.  The inflexibility of manual labour will be magnified during peak seasons when daily volumes can surge three to five-fold.

No industry standard

Currently, there are no industry-wide e-commerce packaging standards, with shippers using packaging of all shapes, sizes, materials, labelling formats etc. This causes inefficiency throughout the supply chain for processing, sortation, automation and delivery. The e-commerce marketplace is fragmented and driven by lowest cost-to-serve, especially for lower-value purchases that form the bulk of non-machinable items.

Damage to products

Non-machinable e-commerce items are more likely to be damaged during handling and transportation. Content within poorly-packed parcels are also at risk of damage.  Can there be ways to ensure packaging is fit-for-purpose to preserve the integrity of the contents? 

Our efforts so far

Various packaging options are sold at SingPost Post Offices for our customers. However, Post Office volumes only represent a small proportion of the total number and variety of packages that we process on a daily basis. For soft packaging, we offer poly bags, but are unable to control the customer’s product packing process.

SingPost, DHL & FedEx publish updated packaging guidelines that are publicly accessible online. SingPost also shares these guidelines with corporate customers e.g. Shopee. Despite our efforts, adherence to these guidelines is still far from a de-facto industry standard.

Requirements

Currently SingPost has a recommended sizing for machinable parcels of minimum 30cm x 20cm x 5cm, maximum of 80cm x 60cm x 6cm and weight of between 300g to 30kg. These dimensions match existing locker infrastructure such as POPStations and Locker Alliance. Shipping labels must meet the minimum size of 105mm x 148mm with minimum of font size 10 to facilitate speedy and correct Optical Character Recognition (OCR) reading.

Packaging should be also sufficiently robust to maintain its shape and integrity through the process of shipping and handling.

Desired Outcome

Solutions that would be considered

Potential solutions can include packaging sizes or designs that enable more efficient handling of e-commerce items, or a method that can convert non-machinable items to become machinable. The solution could address the package design itself, or include an additional pre-processing stage that alleviates the need to segregate non-machinable items, whilst addressing other issues such as packaging quality and sustainability where applicable.

Solutions that would not be considered

At this stage we would not consider solutions that would require integration with the current automated sortation system due to cost of implementation.

Minimum Required Technology Readiness Level (TRL)

Level 7

Expected Impact to Business

The aim is to establish a common understanding between sellers/e-commerce players and logistics service providers on physical dimensions and attributes of packages and parcels; and how labelling should be designed and affixed to enable an effective delivery process.

More retailers are embracing e-commerce following COVID-19. The e-commerce sector has witnessed a rapid entry-of-market and the associated rise in parcel volumes and varieties of sizes and shapes, leading to increased costs due to manual labour required for processing non-machinable parcels.

Rising expectations by consumers to receive their purchases as soon as possible translates to added pressure to process all parcels quickly and accurately.

Good packaging will have a positive impact on consumers. It will enable timeliness, and promote delivery assurance for critical items such as legal documents, health products, food supply etc. Better packaging design will also better preserve the integrity of the content. 

To the industry, it is about improving efficiency, enabling frictionless delivery, resilience in supply chain, overall consistency in delivery methods and customer experience, which overall, leads to an improved supply chain.

Development Timeframe

SingPost is prepared to engage with the proposer and set a timeframe according to the proposed solution. However we would like to engage in a Proof of Concept no later than 3 months from the date of award.

Challenge

E-Commerce Supply Chain Challenge 2020 (ESCC2020)

Organisation

Singapore Post Ltd

Proposal submissions are open from 2 Oct 2020 to 20 Nov 2020