The rapid growth of consumer demand constantly powers the consumer packaged goods industry. Nowadays, CPG suppliers have gained an opportunity to adapt their products to meet diverse consumer needs better. However, CPG logistics remains a challenging task for manufacturers of all scales. Learn how to improve your CPG shipping process effectively.
What are consumer packaged goods (CPG)?
CPG stands for consumer packaged goods, a term that means items used by an average consumer daily. Due to their active consumption, CPG requires regular replenishment as we quickly run out of foods, beverages, or household supplies.
In other words, consumer packaged goods are simply the products we need to perform our habitual routines. That is why the CPG industry is one of the largest economic sectors in the US, which amounts to $2 trillion in trade turnover.
There is a range of features characterizing the nature of consumer packaged goods:
- High purchase volumes: orders for CPG are frequently significant.
- Global distribution: CPG delivery is needed in any part of the country.
- Low cost: prices for CPG are relatively low compared to the purchases of other types. That is, the CPG target audience involves everyone.
- Low buyers’ engagement: consumers spend little time picking CPG. Often, they choose the goods they have been using previously.
What are the challenges of CPG shipping?
According to the Boston Consulting Group, nearly 80 percent of CPG supply chain executives state transportation as their biggest challenge. That’s why outlining the proper logistics strategy is crucial for your CPG supply chain.
The replenishment of consumer packaged goods would be impossible without effective CPG logistics. There are some key CPG logistics challenges that you need to know to overcome possible struggles.
Many consumer packaged goods have a short shelf life, so they must be delivered within strict deadlines. Storing the dry goods or household items for some time is not a problem, but the central part of the food products will not survive the shipping delay.
On-time delivery is a number one priority for those shippers who move freights regularly (for example, delivering goods for retailers or shop owners). In this case, you have to stick to a strict delivery schedule and focus on planning activities.
It is important to remember that CPG often requires more time to be appropriately packed, especially fragile items, so make sure you count it when preparing your shipment. Also, try to preview the route you will use to avoid possible traffic congestion.
Since the CPG industry is extremely large-scale, it is often difficult to predict the actual demand for certain types of products. The CPG market is booming, and it is sometimes impossible to maintain sufficient capacity to deliver all the ordered goods, especially during peak or holiday seasons.
High consumer demand and the inability of many transportation modes to provide the required capacity often result in increased transportation costs. Shippers are constantly searching for alternative solutions, such as collaborating with other companies to share warehousing or truck space or combining loads for a full truckload shipment.
It is necessary to be aware of the strict compliance of CPG shipping. Product shortages, overages, and substitutions sometimes occur in the process and can lead to monetary fines. Shipping excess quantities attract lower penalties. However, the customer will probably not like being forced to pay for extra goods.
CPG shipping strategy
A solid shipping strategy is essential to avoid possible risks when transporting packaged goods. To achieve this goal, you need to be well familiar with the core specifics of CPG shipment. GoShip will help you review all the necessities of CPG logistics.
CPG goods storage
Storage of consumer packaged goods is principal for a successful shipping flow. Customers and manufacturers want to ensure their products are transported according to all the rules and nothing threatens the goods’ quality. It is why we recommend learning about the main features of CPG storage.
- Dry goods. As a rule, dry goods are pretty easy to store, as they have a longer shelf life. That means you can use essential protection for them and thus reduce the transportation costs. Also, you can pack dry goods more compactly in the truck. Yet, certain dry goods will need more consideration to store appropriately. For instance, dry food products must be hidden from direct sunlight and kept observant of temperature control.
- Perishable goods. Unlike dry goods, it’s vital to store perishable products more carefully. As they must stay fresh after delivery, carriers primarily transport perishable goods in reefer trucks with a temperature regulation system. Using refrigerators will elevate any possibility of foods getting spoiled. You might consider applying diverse cooling supplies such as dry ice or insulated pads for short delivery distances. Dry ice is hazardous, so using it will influence your freight class.
The appearance of transported goods directly depends on your choice of packaging method. If you want to ensure the customer will accept the product after delivery, it is better to pay attention to proper packaging in advance.
Typically, CPG items aren’t large, so they get transported in crates. It is where you can use the crates’ space with maximum effectiveness, keeping your goods condensed inside as much as possible (if these items are not fragile and do not require additional packaging).
Due to their exceptional diversity, consumer packaged goods require you to examine available packaging options precisely. To pick the most suitable, we recommend you evaluate the product’s specifics and learn more about the main types of CPG packaging.
This type of packaging provides reliable protection and can protect various transported products. By choosing cushioned packaging, you will avoid any damage during transit. Additionally, you can apply air pillows as an inner packaging and thus reduce the risk of collision and movements of the products inside boxes.
Bubble film is the best choice for transporting household items or cosmetics – it prevents them from breaking or spilling out. Considerable volumes of the film work perfectly for fragile units, especially those containing glass elements.
Void fill takes up the space in a box and thus keeps your items from unwanted movement. For more miniature goods, the void fill will take up the space inside the bag to make the product packed hermetically.
Many types of mailers suit the whole range of CPG except the fragile ones. Protective mailers are an excellent option for small amounts of goods; however, they can also accommodate more significant items.
Different bags will do the trick with many packaged goods that aren’t likely to lose shape during shipping. Additionally, specific bags are necessary as the inner packaging for the products. For example, waterproof bags ensure that the liquids remain contained.
If you are not shipping your CPG in refrigerators, you might consider getting cooling materials such as dry ice bags or insulated boxes. These options are pretty effective for delivering products over short distances.
Successful scanning operations would be quite complicated without labeling consumer packaged goods. Labels include a short description of the transported item and provide particular shipping directions, if there are any. Proper labeling saves time and effort as you don’t have to open up the boxes to check the containments.
Barcodes are the most common way to label crates with CPG. The barcode system enables fast and reliable data collection and improves product flow. Barcodes allow customers to observe how the ordered items move through the supply chain. Moreover, the information inserted on the barcodes keeps the shoppers posted on the delivery time.
According to the research, about 70% of consumers purchase mainly relying on its brand packaging. That is why keeping the original brand labels while transporting CPG is crucial. Sometimes, customers are less likely to accept their goods if the brand labels are absent or damaged.
Brand recognition is a long-established feature of CPG customers, so even if you are shipping the products of a relatively unknown manufacturer, try to follow the principles of brand awareness.
Before condensing the goods into boxes, make sure they have brand stickers. If you are delivering a large number of similar items to one customer, you may also want to place the branded sticker on the box, so there is no need to unpack it every time.
Lately, sustainability has been one of the significant trends in CPG packaging. Statistics prove that CPG logistics tend to develop by following modern consumer culture. A large part of active packaged goods shoppers is represented by millennials and gen Z people who pay much attention to green solutions. Being eco-conscious can significantly influence the order scale. That is why sustainable packaging is worth considering.
Replacement of materials is the key: eco-friendly alternatives can easily substitute traditional bubble wraps or packing peanuts. There are many opportunities to use craft papers or air pillows made of recycled plastic. It will reduce the harmful impact on the environment and increase the attractiveness of your production. Besides, the manufacturing cost of sustainable materials is way lower than regular plastic packaging.
How to optimize the CPG supply chain
Shipping companies are constantly looking for workable options to resolve the key CPG logistics challenges and optimize the delivery flow.
- Palletizing. Using pallets to secure your freight is highly recommended as it provides reliable fixation for your cargo and facilitates loading/unloading. Regardless of the number of boxes on it, the pallet is considered a single piece which can significantly reduce the shipping costs.
- Understanding routes. When choosing a suitable shipper, ensure they know the best routes to deliver the freight quickly and safely. It will significantly reduce the risk of possible delays.
- Digitalization. If you are interested in updating the lifecycle of your business, you can consider applying shipping software for managing the orders volume and capacity or using discount programs. There is a wide range of shipment tracking systems for better control over the shipping process. Using digital appliances can also help with the proper CPG labeling.
- High carrier capacity. Often, there is a problem of lacking qualified drivers who determine a successful shipment. Besides driving, they sometimes provide loading/unloading services and control the delivery volumes.
CPG shipping modes
When picking the transportation mode of your CPG shipment, there are several critical factors to consider. You can go through a short checklist to come up with the right decision on the shipping way.
- Weight and volume of the load. The transportation mode choice mainly depends on the actual volume of units you move. You will undoubtedly lean on the number of ordered units. Still, you can only evaluate the load volume after packing all the goods into boxes (or other packages). You will also have to weigh the items to see what type of truck suits you the most.
- On-time delivery. Pay attention to required delivery time – this is one of the highest priorities of CPG logistics. Different shipping modes provide other delivery time possibilities.
- Type of goods. Some kinds of CPG require special temperature regulations or additional protection to save the products’ freshness and shape.
Full truckload shipping
Full truckload (FTL) shipping mode allows moving loads weighing up to 45,000 lbs. In this case, you get the whole vehicle dedicated to your shipment. Thus, you can be sure to deliver the CPG on time as the driver doesn’t make any extra stops and goes directly to point B.
Less than truckload shipping
Less than truckload (LTL) shipping works by sharing the truck space with other customers, which makes this transportation mode more affordable. However, the delivery delays are possible due to more extended pick-up and drop-off procedures. LTL shipping weight limit is 20,000 lbs.
Refrigerated (reefer) shipping is an irreplaceable method of shipping perishable packaged goods such as food, medicines, or cosmetic products. Reefer trucks have built-in refrigerators and maintain climate control throughout your shipment. Besides, reefer vehicles have special protection from different weather conditions, which allows you to keep all the items fresh during transit.
CPG shipping rates
The price of your CPG shipment depends on your load’s actual weight and size. In addition, the shipping mode and the type of truck you choose significantly contribute to transportation costs.
With GoShip, you can immediately get a quote and compare the rates from multiple carriers in real-time. Don’t hesitate to use our online calculator tool to summarize your CPG logistics cost.
CPG shipping with GoShip
We can help with competitive rates, more efficient processes, and optimized operations. Calculating CPG logistics costs is best for filling in shipment information and comparing quotes. With GoShip, you can compare quotes from multiple carriers in real-time.
- Instant and free freight quotes
- Full truckload and less-than-truckload shipping services
- 24/7 shipment tracking
- A self-service platform for online shipment booking