Custom Packaging Explained: What's With The Under/Over Ship?
The 10% -/+ Shipping Rule Explained
Over shipping or under shipping the number of units ordered is actually very common in manufacturing. The reasons vary by industry. The custom packaging game is no different, and confusion (and shock) around this issue abounds!
When manufacturing custom packaging, one of the biggest drivers of cost is time. The price of your boxes will account for the setup and time it takes to print and cut your order.
Keeping costs low to the customer is an important factor when production systems and machinery are developed. The volley between cost and quality is also at play.
Why do packaging manufacturers under or over produce your order?
There are two main reasons for under and over ship in custom packaging manufacturing.
Cost Conscience Machinery
The machines used to print, cut, and palletize your custom packaging order are built for speed. While they’re excellent at producing boxes, they focus less on counting them.
To avoid setting up the job a second time after the final number of boxes as been properly counted, manufacturers will typically aim to produce just a little more than is needed. This practice is also essential because of the next reason for under/over ship.
Casualties
When manufacturing at high speeds quality issues are expected. The production team will survey the finished boxes and remove any units with print registration errors, buckled corrugation, or tearing.
Just like self-checkout machines, presses have their bad days too. If there are more than expected rejected units, your order may under ship. Likewise, if the reject count is low, you’ll receive more boxes than you ordered.
What if you already paid for your order?
The accounting for under and over ship can get tricky if you paid for your order in advance, or if you budgeted for a specific amount. Here are the answers to some common questions we receive.
Will I be charged for the extra boxes I didn’t order?
In most cases yes. However, the standard policy when charging for over ship is no more than 10% of the ordered quantity.
So, if you ordered 1,000 units, you’ll be on the hook to pay for up to 1,100 boxes shipped. But if you receive 1,200 units, you’ll get 100 boxes for free and still only be charged for the max over ship of 10%.
Will I get a credit if I received less than I ordered?
Absolutely! Because under/over shipping applies to every order, you’ll likely receive a credit on your account rather than a refund.
Your vendor is liable to produce no less than 10% of your ordered quantity. This means if you ordered 1,000 units and only received 800, they’re on the hook to setup production again and fulfill the missing pieces.
The examples above are the industry standard, but policies vary by company. You should discuss the under and over ship policy with your packaging vendor before you order.
A reputable vendor will inform you of the final shipping quantities before delivery. This way you can prepare ahead of time for a revised invoice, accounting for credits, and informing your 3PL what to expect.
