How Right-Sized Packaging Reduces Waste, Freight Costs, and Complexity

Speaker A: Foreign m. Welcome back to the Sustainable Design Lab podcast. I'm Brody Vanderdusen.

Speaker B: And I'm Chris Bradley.

Speaker A: And on this show we sit down with the people who are rethinking packaging systems from the inside out. At the lab, we're not just watching innovation happen, we're cultivating it and sharing these ideas that are shaping a more efficient and circular future.

Speaker B: And today on the podcast, we're joined by Michael Marzalek and Cameron Stout from Packsize. Now, Packsize has been a leader in right sized on demand packaging for years, helping companies reduce waste, cut emissions, and design packaging that actually fits the way products move through the supply chain. And for those of you who may not be familiar, a, uh, pack size machine actually creates a custom size corrugated box for each order right there on the warehouse floor. So instead of picking from a few standard box sizes and filling that extra space with packaging material, there's the machine cuts and forms a custom box that fits the product exactly when it's being packed.

Speaker A: And recently, Packsize and Veritiv have announced a partnership focused on bringing right size packaging solutions to the market, making it easier to connect automation material strategy and sustainability goals.

Speaker B: And in this conversation, we'll explore why dimensional efficiency matters more than ever, how packaging decisions show up on the warehouse floor, and what it takes to scale smarter packaging through collaboration.

Speaker A: Michael, Cameron, welcome to the show.

Speaker C: Thanks for having us. Appreciate it. You're taking the time.

Speaker D: Thanks for having us.

Speaker A: Both of you spend a lot of time working across partners and customers. What originally drew you to the challenge of right sized packaging and why does it feel especially, especially urgent today for me?

Speaker C: To be frank, I didn't know a whole lot about the industry when I came in, so, you know, it was a new challenge. Uh, it was totally different from what I'd been doing in the past. But I can tell you what keeps me in it. The overall complexity and the intrigue that the warehouse environment brings. Certainly, you know, from the outside looking in, thought it was a very simple solution that you're trying to deliver, you know, and that you were just selling boxes, right? But it was so much more than that, you know, and just the ability to work across different warehouse automation tech. It makes every day fun and I learned something new every single day. So to me, it's still very urgent because of the overall adoption rate. I think it is drastically increased over the last five years, but there's still so much room to grow and there's so much more that we can give back to the world.

Speaker A: What about you, Michael?

Speaker D: I think there's a lot of things that drew me to it, but the one that stands out is it felt like there was a personal connection for me, I think. And you've probably had this experience where you order a small item and it shows up in a box that could hold 50 of them. Like that is. It bothers me. I'm a guy that gets frustrated when my recycling bin's full and I've got to get another oversized box in there. And, you know, I remember, you know, ordering a pair of shoes and it came in a box that looked like it was like tailor made to the actual shoes that I ordered in their box. Like I could shake it, nothing moved. And, you know, from that moment, it kind of piqued my interest. Like, what is this? How does it happen? And that to me, I think, you know, brought some initial intrigue and then, you know, getting a chance to kind of explore and understand who was actually focused on this kind of brought me to pack size. And, you know, fortunately I had fellow colleagues at my previous organization I was at, kind of come over and talk about it and really connecting kind of the purpose of the organization to the work that was being done. And I think that makes it very easy to get up even on a Monday. Right. Like, if you're motivated and the purpose of your organization is directly aligned with things you value, it makes it very easy to be excited, to do your best work, to collaborate and to continue find ways to ensure that you can expand and grow, you know, not only the business. Right. But like your understanding of the market, your understanding of solutions and ways to deliver value to customers.

Speaker B: That's great. So, Cameron, I have a question for you. So from your perspective, where do packaging inefficiencies most often show up up inside of fulfillment operations, and why do they tend to persist for so long?

Speaker C: Yeah, I think there's a couple things in a couple places where it shows up. Usually it's just right at the very end of the line. So a lot of warehouses that we walk into today, they've really optimized the picking portion. So getting items, you know, out of storage and kind of into a tote or into, you know, just another container, that's all been optimized. And that's where a lot of money has flowed over the last a decade. But where it falls down is typically those totes full of an order will just go to a manual packing station. So with those manual packing stations, they're extremely slow. So even, you know, when, when someone is focused, you know, the Average manual packing station can move at about 45 packages per hour, which really results in just a lot of labor that gets thrown at these things. So, you know, the worst thing that we can see, or I guess the biggest opportunity is when we go and we see a, uh, you know, a very nice automated warehouse that, say, has, like an, uh, automated storage and retrieval system. But then it just goes to a sea of pack stations where there's, you know, 30 to 40 people that are continuing to pack. So I think that that's one piece. The second is just the amount of touches that it takes from when a product will come in off of a trailer or in a container. The average amount of touches is over 10. You know, where in very highly automated environments, we've been able to get that down to 4, 5. That wasn't all just pack size, but now we're just reducing the touches and we're reducing the handling. Reason why it persists for so long, a lot of it is just prioritization. I think that a lot of companies have a lot of just overall objectives that they're trying to achieve. Some of them are inside the warehouse, some of them are outside. But, you know, when we get priority, usually that ends pretty well for us. So it's just a matter of, you know, is this important and is it important enough, you know, to actually mobilize, you know, an entire organization and make a change?

Speaker A: MICHAEL Sustainable packaging conversations often start with the materials. Why is dimensional efficiency such a critical and often overlooked part of the equation?

Speaker D: Brody uh, I think it's a really good point you make for starting with materials, right? I think that's the easy way to try and solve for things is look at, you know, how do we replace what we're doing with a better material makeup, something that's more environmentally friendly, potentially something that has circularity benefits. But in our world, dimensions and, you know, dimensional efficiency is a big thing. And this is something that I think hits at a couple different levels. I think, first, right, is getting to the point where you're only using the amount of material you truly need. I think it's easy to take small item, put in large box, move on, potentially do that same step, fill with more material to fill the box and drive damage reduction. But, you know, I think the first piece is just simply reducing to what is actually needed for the task. So, you know, specific here, right? We're talking about shipping products. I think the other side of it is you think about cost to an organization, you start thinking about buying more material. That's Truly needed. So sometimes we get in situations where, you know, we're looking at, how much does a box cost? Where we'd like to think about is, like, how much does what you really need cost and are you actually getting all you can out of it? And I think the biggest area, and this is where we see, you know, a lot of the savings come out when we're, you know, engaging with partners, when we're engaging with customers, is really how does that improve your freight efficiency? I think year over year, we see large freight carriers adding 5, 6, 7% increases to their charges. And when we think about dimensional efficiency, we've already reduced the amount of material that's needed, but now we can actually take it a step further and start thinking about how do we reduce the amount of trucks needed to get material from one place to another. So I think I kind of led with this, but I think it shows up in a lot of different areas and they tend to compound on one another, which is why I think it's a big piece of the equation and getting operations and distribution and just general supply chain. Right.

Speaker B: All right, so, Cameron, this is a question for you. Um, when you step back and you look across multiple customers, where do organizations most underestimate the cost, both environmental and financial, of shipping air?

Speaker C: I think they kind of go hand in hand. You know, I think that there's a lack of understanding of just the financial impacts of things, whether it's you're using too much material or our biggest lever is outbound logistics savings. So, you know, we can save the average customer, you know, between those two, between the material in corrugated void fill and outbound logistics, it's about 70 cents per package. So that's a substantial amount. That's actually more than most of the actual cartons themselves cost. So a lot of times, as companies are just trying to put one foot in front of the other, they're not necessarily thinking about the environmental cost. And sometimes sustainability just gets kind of blanketed. Is that in order to be more sustainable, usually it comes at a cost to the person that is making an effort to become more sustainable. But we do see that, you know, we are, uh, a pragmatic green solution where we can impact not only the cost of choosing a more sustainable medium like corrugated, but then just the outbound logistics savings just can save so much and really drive some of these initiatives forward.

Speaker A: Absolutely. That's so important. Right. Sizing changes how packaging is designed and specified. How does automation shift the way that packaging engineers, operation teams and sustainability teams, all of them Work together.

Speaker D: It's a good question. I think it's, it is challenging though, right?

Speaker C: I've.

Speaker D: I've heard this countless times when I'm working on projects or whether I'm just developing strategies is like, I think the standard is like automation introduces complexity, which can be scary, but it doesn't have to, right? And I think sometimes automation is thought of like completely replacing any type of human interaction, going specifically to either machine driven, computer driven, robot driven. And I think honestly for those teams, right, when we think about packaging engineers and those that are designing, we think about sustainability teams that are trying to keep those teams in check because they're trying to balance pretty versus, you know, what is environmentally correct, right? What is. There is an even more environmentally correct. What is, you know, regulatory speak to, right? Depending what state you're in, you have regulations. But I think when we get to automating the process, what we're able to do is we're kind of able to bring all of those people together and come up with a solution, whether very small and maybe it's just kind of tackling the stuff nobody wants to deal with, or maybe it's very big, right? And it's completely harmonized with other systems, other automation. But I think what it really does is it gives a chance for packaging engineers to kind of standardize, but do so like in the moment, let the automation drive some of the decision making. On the operation side, I think it allows you to think about ways to upskilling workforce. I think it gives you a chance to really think about labor allocation and maybe we can reduce that footprint. And then on the sustainability side, I think that's where you have the opportunity for larger wins, right? Where we see it happen, you know, whether it's material reduction, we see it happen, whether it's getting rid of the air pillows, you see the packing peanuts, all of that stuff. So I do think all three groups can kind of come together. But I think it's important to go into it knowing that it doesn't have to be 100%, right? You can start with 10% and still create impact and then go from there and start targeting 20% and 30% versus thinking about it as one holistic challenge can become complex and it can become overwhelming at times. A lot of times sustainability has like a stipulation of like increased cost. And when we were just getting to meet each other before this, right, we kind of talked about stuff in Europe, stuff in the US And I think a lot of times the difference in kind of the North American Market is those costs people aren't always willing to pay for, which is why we're trying to find a way to deliver it, that sustainability impact. But do it with an ROI for customers. Right, because it's a hard thing to make that investment. And I know there's great solutions out there, but sometimes the cost is prohibitive to moving forward, which is kind of the challenge we're trying to solve for every day.

Speaker B: All right, Cameron, so, uh, this is another question for you. What concerns do you hear most often when companies consider automated box making and what usually changes once they actually see it in action?

Speaker C: There's a stigma around automated packaging, that the machines are not reliable enough. So for us, when we place a machine into a facility, usually it's like in the centerpiece of an operation. So if that machine does go down, yes, it can have operational impacts, but I think the actual incidences of when it does go down are much less than people anticipate. So another few other things that come to mind is just, do they have the space? How do they make process changes around it? Usually if you are going to an automated packaging machine, there is infrastructure changes that need to take place, and a lot of people just have a hard time envisioning how this fits into their process flow. So once they see it in action, and once they see an elegant design and something that has been well thought out most of the time, the fears around the changes that they need to make start to become a little less fearful. And then I also think hearing from customers and hearing testimonials about people who are leveraging the equipment day in and day out, out, you know, and just, uh, speaking to overall reliability and just the efficiency that it's added to, the entire operation usually ends up winning potential customers over. And, you know, and they can just, you know, seeing is believing.

Speaker A: So, Michael, across the implementations that you've supported, where do customers tend to see the biggest sustainability wins? You know, is that through material reduction, freight efficiency, emissions, or something completely different?

Speaker D: I think you called out a great list in setting up the question, but for me, I think it's two big drivers. Right? It's material reduction in freight efficiency. And so if we think about freight efficiency, it's just being able to put more stuff in a single truck to be delivered. Right. Or to get more on a single pallet. So you start reducing the amount of air that exists within those vehicles, you start reducing dimensional weight charges, you start seeing a lot of freight efficiency, both from a cost standpoint, but also just purely trucks on the road. Which I guess would lean specifically to emissions, which you talked about. If we can start reducing the demand on oil and gas, reducing emissions output because there's less trucks on the road, it kind of feeds. But I think a lot of times when it's just looked at like at a surface level, freight efficiency is certainly there. And then you know, material reduction, I think, you know, depending who you are, right. You may be in a position where your dimensional data is very accurate and your set of items that you're responsible for shipping or distributing is such that it's a lot of repeats, a low volume of items. But when you get into larger scale E commerce, when you get into a lot of B2C shippers, consumer product goods and you start having a broad product portfolio, it's really difficult to have shipping containers that are using the right amount of material to serve their purpose. Instead, what you see a lot is hey, we have a small, we have a medium, we have a large and an extra large. And if it doesn't fit in the medium, we use the large. And you know, the difference in size could be 20, 30, 40%. So you know, you definitely do see the material reduction. But I think, you know, as a first indicator on sustainability is probably more to freight efficiency and emissions. Second piece we get into is more around material reduction.

Speaker B: And Cameron, I guess I would ask, how do you help teams translate those sustainability outcomes into metrics that resonate internally with operations, finance and leadership?

Speaker C: Yeah, so we've got a couple different ways. So uh, we do provide a reporting platform, you know, that is gives uh, customers information just about what their average box size looks like that they can contrast and kind compared to what it was prior to packsize. But we also leverage a few other partnerships. So one in particular is with a company called Accurate where they handle a portion of the process that's called cartonization, which is basically, you know, displaying Tetris with your items to say here's the smallest box that we could possibly ship something out in with that they've got reporting metrics that will show you the amount of trailers that have been saved. It'll show you the amount of material that's been saved, the amount of void fill that has been saved. And if that's not enough, then basically we've got baseline data. Whenever we're building a business case, you know, we'll use the baseline to justify really our existence and we'll just do that in reverse to basically say here's where you are currently at today and let's pretend that you Went back in time before pack size. And it's kind of the inverse of the metrics, if that makes sense.

Speaker B: Makes sense.

Speaker A: Michael. The recent PAC size Veritiv partnership, which we're all really excited about, you know, is really about making right size packaging more accessible across all markets. From your perspective, why are partnerships like this essential to being able to scale sustainable packaging solutions?

Speaker D: Well, I hope I'm right about this before I answer because, um, you know, I'm really excited going into it as we kind of launch. But no, I think that, I think the first thing is, is getting to the point where you have partnerships that have mutual value, but also you're trying to solve similar problems. And so if, if the end goal of two organizations is aligned, then I think it likely means the partnership's going to thrive long term. When I think about what appeals to me, especially from the Veritiv partnership that we're now I can't say a part of because that would be redundant. Right. But now that we've kind of joined forces is really just more about taking our gaps and finding a partner that really solves for a lot of those. And then, you know, at the same time, like we are one part of an equation, right. When we think about end to end supply chain, Veritiv can support their customers and their partners in so many different ways. They bring capabilities and they bring relationships and trust. Right. Like places where they've been in for decades, you know, relationships are there and places where m. Maybe we talked on a previous question, right, about complexity. Maybe that trust, that relationship level allows us to kind of ease some of the concerns around complexity. But you know, I think it really boils down to this one as we want to look at how do we create a real impact. It's the fact that we're complimentary to one another. We have the ability to go in and provide kind of now with Veritiv a full scale supply chain solution. And you know, it's not going to be everything is a fit for pack size. It's, it's. Yeah, I'd be lying to you if I said that. Right. But you know, what we see is there are certainly opportunities to do a lot of different things. And then where we have shortcomings, it seems like every time the Veritiv relationship is showing a strong competency towards being able to solve those, which is what gets me excited.

Speaker B: Well, we're certainly excited about the partnership and want to sell and get a lot of these, uh, pack sized machines into the market. This one's back to You, Cameron. So looking five to 10 years out, how do you see packaging automation and sustainability becoming more interconnected inside of fulfillment and distribution networks?

Speaker C: Yeah, I think that there are a few kind of things that are happening in the market. Some of them have to do directly with packaging automation and others have to do with legislation. So, you know, overall we have seen the adoption rate increase significantly, specifically in retail, E commerce. There's been a lot of wins and there's, there's high adoption there. However, with what governments are doing, uh, specifically in North America and throughout the states is they're introducing something called epr, which is extended producer responsibility. So with that they're going to be taking a look and saying, what's the quantifiable impact that you've got, not only of, uh, the products that you're making, but then everything that branches out from there. So packaging falls right underneath that. So in states where this is active, companies are having to report on, you know, the materials used, the amount of tonnage of waste that they're putting into the environment. And, you know, there will be fines and additional action that's taken against companies that are the largest offenders and really it's going to start hitting their bottom line. So easiest way to, you know, reduce waste is to use a solution that inherently reduces waste, which, uh, packaging automation does. Right? It's going to reduce the size of the box, it's going to reduce the amount of corrugated that gets used and in turn it's going to reduce waste and specifically like plastic void fill, which is going to be just a major offender. So, you know, there's the, uh, there's the epr, but there's also packaging legislation that's taking place that's basically deeming this, we're already seeing it in Europe. It's something called ppwr. And with ppwr, basically it's a, it's a packaging waste regulation where, you know, the mandate in the actual law itself is that you cannot be shipping packages that are less than 50% full. And believe it or not, not that would be a monumental challenge for a lot of companies in North America today. So it's naive to think that that isn't going to come across the pond. I think that people are looking out to their doorstep and they're looking out to their recycling bins and saying, man, this is a lot. I don't think that I want to stop, you know, the way that I'm getting my products and I like the convenience of things. However, I think people are socially responsible and I think they're looking at the mountains of waste that they're creating and hopefully wanting to do something you. Which in turn will have consumer pressure on Aldi. So it's kind of a cocktail of, uh, a lot of different forces at play, but ultimately I think it will lead companies to make more sustainable packaging decisions, which we're super excited about.

Speaker B: All right, so, uh, this is a question that we ask all the guests that come on our show. So when you're thinking about the future of packaging, what is one thing that gives you hope? Because, you know, in this whole world of sustainable packaging, we really need good stories of hope. So excited to hear what you have to say. Let's start with you, Cameron.

Speaker C: Yeah, the thing that gives me hope is that I think that the amount of people that care is growing and you look at uh, how Gen Z approaches the problem, their impact, how active they are on social media, it's like you've got a lot of packaging fail videos that occur out there and customers. And just in our experience and some of the unbiased research that we've done, we're also seeing that people are willing to wait a little bit longer for a more sustainable solution. You've seen Amazon make a few changes, you know, um, on just, you know, you don't need your shipment split into three, you know, why don't you elect to get it three days later and just put it into one? You know, and I think that people are, they're making that choice and saying it's time that we start to reduce waste. So overall I think that just the level of care coming from the consumer is much higher. And that gives me hope that, you know, that'll lead to real change because ultimately there needs to be some pain amongst shippers and if there's not pain and if people are not having the decisions that are being made in the name of sustainability start to impact the top and bottom line of companies, then change will never come right? Because then it's just, you know, let's just get something out the door for as cheap as we possibly can. And that's how it's always been done. And I'm, um, hopeful that that's not how it will always be done.

Speaker B: Yeah, I couldn't agree more, Cameron. How about you, Michael?

Speaker D: Here's what I would say is the market has such an opportunity in front of it to look at opportunities to implement right size packaging, automated packaging. I think over the last five to 10 years there's been a big focus and I'm going to get a little Technically, right on, like the pick process. So we've seen lots of implementations with goods to person systems, automated storage and retrieval systems. I think, you know, a lot of warehouses today are leveraging some type of autonomous mobile robot to move stuff around, support the pick. But you know, the pack is kind of the next evolution for us, which gives me a ton of hope because it hasn't been thought about, it hasn't been front and center. But you know, what you do is you create all of this efficiency on the front end of a distribution operation and then you go to a very manual, at times antiquated process to support it. So, you know, it allows us, I think, to move faster, it allows us to move more efficiently. And you know, I think that's what really gives me a lot of hope is we think about if everybody already had something, it's like, what else is there? But like now it's still like very, very new. And I think the other piece of it is, is the technology is advancing so fast. Like I think about conversations I was having two years ago about certain systems that have now been either upgraded or added to, or maybe they've been uh, replaced by something else that's now going to bring greater levels of efficiency, higher value propositions, easier implementations. Like, it's all keeps happening, but again, the market there is very much, you know, I think open for it, but also at the same time it's not been widely adopted or thought about. So that gives me a lot of hope for the future that gains can be made, right? We can create real sustainability impacts because if our penetration is 10%, well then we've got a long way to go and I don't think we're any higher than that myself.

Speaker A: I love both those answers. I agree with both. I think that this is my favorite part, honestly of doing this podcast is getting to talk to so many different people. But also this last question as far as is a, uh, reminder of why we do what we do and what we're working towards and that there is so many things and I feel like everyone so far has had a different answer, which has been really cool to hear. So thank you for both of your times and for joining us. We're really excited about this partnership and what it means for our customers.

Speaker B: Thank you very much, guys.

Speaker C: Thank you so much.

Speaker D: Thank you.

Speaker A: M. Today's conversation really reinforces idea that sustainable packaging doesn't happen in isolation. Things like designing for a full system rather than just individual components. And in the same way, like collaboration between different people within the market your suppliers both upstream downstream is so important.

Speaker B: And I guess what really stood out for me was how quickly this is really shifting from a uh, sustainability initiative to a uh, compliance requirement. With regulations like extended producer responsibility or epr. In the United States and the PPWR in Europe, companies are now being held financially accountable for the amount of packaging that they place into the market, um, especially when it comes to excess material and empty spaces in transit. So solutions like packsize are really like at a timely point in the market where they can really make a big impact for producers.

Speaker A: Totally agree. You know, we're really grateful to Michael and Cameron for joining us and sharing their perspective. If you enjoyed this episode, please give us a follow, leave a five star rating and share it with someone else who's working in packaging or fulfillment strategy.

Speaker B: And for more resources, case studies, upcoming episodes, trends, et cetera, you can visit Veritiv's Sustainable Design Lab LinkedIn page. And thanks a lot for listening and we'll see you next time.