Market Insights | Page 1

Most packaging decisions were made years ago and have not been revisited since. Over time, costs shifted, carrier rules tightened, and sustainability became a genuine business requirement. But the packaging stayed the same.

For many companies, the result is packaging that quietly costs more than it should. Too much material, the wrong material, or both. The costs do not appear as a single obvious line item. They hide across freight invoices, damage claims, and void fill expenses, spread out enough that no single number triggers a review.

This article breaks down what packaging material optimization actually means, where those hidden costs tend to accumulate, and how an engineering-led approach can help you reduce cost, improve performance, and ship smarter.

Dimensional weight, nicknamed DIM weight, is an alternate formula used by couriers to determine an item’s shipping weight. Also known as “volumetric weight,” DIM weight accounts for how much physical space your package occupies rather than merely its weight on the scale.

If you’ve shipped items at any point since 2015, you know DIM weight and its potential to drive up shipping costs all too well. That’s especially the case if you have a light item in a large box, as couriers calculate both traditional weight and DIM weight, then charge you based on the higher number.

The introduction of DIM weight has transformed how both B2B and B2C companies think about packaging. Overlooking a package’s size in relation to the product inside can increase shipping costs significantly, even if the package is fairly light when placed on the scale. Although it may seem like a purely cost-driven consideration, optimizing your package’s DIM weight also has sustainability implications. In our current landscape, where sustainability matters to consumers, retail partners, C-suites, and government bodies more than ever before, any measure that saves costs and enhances environmental impact is a major win.

The demands of modern supply chains are higher than ever: products need to arrive quickly, securely, and at a low cost. In this efficiency-driven era, engineered industrial packaging has become essential for operational success. It protects products, reduces costly damage, and lowers overall spending through improved Total Cost of Ownership (TCO).

Smurfit Westrock Packaging Solutions leads the way in providing innovative, sustainable, and reliable packaging solutions that help businesses thrive.

In recent years, nearshoring has emerged as a prominent global trend. This surge can be explained by many global events that make companies take the strategic step of relocating their business operations to neighboring countries. In the US, nearshoring is gaining traction as a larger number of businesses are shifting operations from APAC countries to Mexico — a move designed to reduce risk amid significant global volatility.

According to a recent Morgan Stanley study, new nearshoring investments could reach about $46 billion over the next five years, helping to boost Mexico's annual GDP growth to about 3% between 2025 and 2027. This has the potential to accelerate the growth of Mexico’s manufacturing exports to the U.S. from $455 billion to an estimated $609 billion over the next five years, boosting Mexico's economy while delivering benefits to US companies. 

Nearshoring is often credited with helping to reduce geopolitical risks by establishing closer ties with neighboring countries. It also offers compelling advantages for businesses equipped with the right strategy, such as enabling significant shipping and transportation cost savings due to the geographic proximity between manufacturing hubs and consumer markets. Nearshoring can also help companies minimize carbon emissions associated with long-haul transportation routes.

But in spite of these promising opportunities, nearshoring also brings challenges — particularly in the packaging supply chain. Maintaining consistency, quality and continuity across operations in Mexico and the US is critical. Addressing these challenges requires partnering with a packaging company that brings expertise and resources on both sides of the border. 

In today’s packaging landscape, sustainability matters more than ever. And it’s not just important to consumers; business leaders and legislators alike are prioritizing environmentally friendly packaging. However, sustainability gets a lot more tricky when it comes at the expense of packaging’s cost or ability to protect your product. 

Luckily, there’s a clear-cut way to achieve all three goals: Lowering excess packaging material. Packaging material reduction — the practice of eliminating unnecessary material from your packaging — can help you better protect your product, the environment and your bottom line. Here’s how to get started with this packaging strategy.

Dimensional weight, nicknamed DIM weight, is an alternate formula used by couriers to determine an item’s shipping cost. Also known as “volumetric weight,” DIM weight accounts for how much physical space your package occupies rather than merely its weight on the scale. If you've shipped items at any point since 2015, you know DIM weight — and its potential to drive up shipping costs — all too well. That’s especially the case if you have a light item in a large box, as couriers calculate both traditional weight and DIM weight, then charge you based on the higher figure. 

The introduction of DIM weight has transformed how both B2B and B2C companies think about packaging. Not paying attention to a package’s size in relation to the product inside can drive up shipping costs significantly, even if the package is fairly light when placed on the scale. Although it may seem like a purely cost-driven consideration, optimizing your package’s DIM weight also has an impact on sustainability. And in a landscape where sustainability matters to more consumers, retail partners, C-suites and government bodies than ever before, any measure that enhances cost savings and environmental impact is a major win.

Read on for our quick guide to all things DIM weight, including how to calculate it, how it impacts your packaging sustainability and how to optimize it through savvy engineering and automation solutions. (Hint: To maximize your savings even further, let an expert partner handle that last part.)

There’s no denying that sustainable packaging is becoming the new norm. More than 40% of consumers say it’s a key decision-making factor, and about half are willing to pay more for products that feature eco-friendly packaging. Fueled by customer sentiment, corporations and retailers alike are embracing sustainable materials. In a global survey from McKinsey, nearly 75% of companies said they have already committed to sustainable packaging. Meanwhile, retailers aren’t just using recycled or recyclable materials in their own packaging; they’re often requiring the brands they stock to do the same. 

This year, more than 50% of retail brands will invest in tools that allow them to sell anywhere. And for good reason: Nearly 3 in 4 customers use multiple channels to shop. Meanwhile, research shows that the opportunity cost of not adopting an omnichannel retail strategy could be as much as 10% in lost revenue. But this sales-boosting strategy also comes with a key challenge: channel customization, or meeting the bundling and packaging requirements of multiple retailers and channels. 

Of the many retail dynamics to spring forth from the pandemic, one has shown unreliable staying power: Fulfilling e-commerce orders from retail stores rather than warehouses. Ship-from-store fulfillment is expected to reach $140.96 billion by 2024, driven by sky-high e-commerce order volumes and customer expectations for speedy deliveries. 

Like all emerging trends, ship-from-store fulfillment has the potential to deliver major benefits for agile early adopters. (Think: Faster deliveries, lower shipping costs and less reliance on distribution centers.) But in-store fulfillment can also pose risks for even the savviest retail teams. Without the right approach, your intention of enhancing shipping speeds could actually cause delivery delays, not to mention issues like limited in-store space. 

Smurfit Westrock Packaging Solution’s team has been on the leading edge of ship-from-store dynamics, and we’ve helped numerous nationwide retailers optimize their programs. Through this experience, we’ve gleaned proven best practices that you can implement now to overcome common pitfalls and pave the way to maximum value.

Keep reading for our team’s take on the ship-from-store landscape, including these programs’ benefits, their potential challenges and how the right packaging partner can reduce risk — to the benefit of both your brand and your customers.

Here at Smurfit Westrock Packaging Solutions, we know that navigating the ecommerce world can be challenging. That's why we work with ecommerce fulfillment companies — those that sell and ship products out to customers — to help them select and stay stocked with the right packaging. It gives them one less thing to worry about in the grand scheme.

At the start, it's all about understanding your ecommerce needs and how your packaging might be affected by them. After that, you'll need a solid packaging provider that can make sure you don't miss a beat when it comes to shipping your goods. We cover both of these topics below.

First up: understanding your needs.