Paccurate wants retailers to stop shipping air

In an era when nearly a fifth of retail sales come from e-commerce, many online shoppers have gotten used to receiving their purchases in packaging that is far too large for the item inside. Tubes of lip gloss are being shipped in boxes that could hold at least a dozen of them, meaning retailers are paying not only to send products, but also the air that accompanies them inside oversized packaging.

Paccurate, a software company, helps companies solve that problem by figuring out how they can ship their products in more suitably sized packaging that cuts down on excess waste. Morning Brew spoke with Paccurate’s co-founder and CEO, James Malley, about the software’s special sauce and the specific problems it’s able to solve in the e-commerce industry.

Tell me about what motivated you to co-found Paccurate.

My co-founder and I started working on it because we were doing consulting in supply chain tech, building apps and things like that. And the major carriers, FedEx and UPS, changed the way they did pricing so that they incorporated density. And so some of our clients started freaking out about the hit to their margins, and they’re like, “You guys, just go find something. There’s got to be something to fix this.” We didn’t find anything, and kind of rolled our own. It was like a hobby for a long time.

And then—common story—pandemic hits. All of a sudden, all these big brands start signing up. I think what kept us interested over the four years before it started turning into a business was the sustainability aspect. Because we were working on all this stuff for so long that paid the bills, but we weren’t particularly inspired by it. But this feels very different…There’s a monetary value to sell, but the legacy that our team will leave behind is quantifiable and sustainability-specific.

Today we’ve got a handful of Fortune 500 [companies], and mostly medium to large customers. We have a pretty robust software platform for fixing this problem. It’s not just packing instructions. We’ll help you figure out what box sizes or mailer sizes to buy at the pack station, rule management so things don’t get damaged, etc.

To your point about making a quantifiable difference when it comes to sustainability, can you talk a little bit about the impact you guys have been able to make?

We, in the US especially, are under the impression that it’s on us consumers to save the environment by making better decisions. “Oops, I dropped that can in the trash. I better go fish it out and put it in the recycling.” Those are all good things, and it’s good for each of us to be a good steward of the environment. But the emissions impact of business? It so outweighs the consumer impact that it’s laughable.

There’s 67 billion parcel shipments in the United States every year. Our software saves, on average, a square foot of corrugate per box. Let’s pretend, in my fantasies, that every single shipper uses Paccurate—that’s 67 billion square feet of corrugate. Corrugate is one of the best materials we have from a green perspective. It’s obviously better than plastic, but there’s still a cost to this stuff. Every one ton of corrugate produced, recycled or not, generates about three tons of CO2 equivalent. Just because a material is greener doesn’t mean that we should, as businesses with social responsibility, feel like we get a free pass to use it without any care for how much we use.

So you could file Paccurate and myself under the least sexy of the three Rs, which is “reduce.” That’s where we play, for the most part.

Say I’m a retailer wanting to use Paccurate, and I’m selling a product. What do I input into the software, and what kind of recommendations will it give me?

In a fulfillment center, there’s usually a type of software called the WMS: warehouse management system. An order management system is living somewhere—maybe it’s in the shopping cart or in a store or something. The OMS is sending all the orders to the WMS. And the WMS is like, “OK, I gotta figure out how to produce these orders today,” which includes picking—sending robots or humans in the shelving aisles to find those items and then figure out an efficient way to bring them to a pack station and then put them in a box and then put them on a pallet or directly into a truck. Typically—and this has been changing a little bit, because more folks are using us in their shopping cart to have more accurate shipping quotes—the WMS knows all about the items that are in the orders. So when it’s like, “OK, these are the picks that each person or robot [is] going to do, also I’m going to send a message out to Paccurate’s API and get the packing recommendation for that order.”

What our system does really depends on what they’re trying to solve for, specifically. If they’re just trying to solve for as few boxes as possible—fine. If they’re trying to solve for the lowest cost based on their negotiated, crazy, complicated contract with UPS or FedEx, there might be a slightly different packing solution associated with it. And then we send back the answer for each order with a 3D visual, like 3D Tetris.

What would you say are some of the main motivations that folks are coming to you for this sort of service? Is it sustainability? Is it cost-cutting? Is it consumer demand?

Some of the customers that come to us and go live the fastest are responding to customer demand. Our first big customer actually came in because they were having a cartonization emergency. Cartonization is like the old-timey term for what we do. There was an influencer that posted a picture of a badly packed box. It was like a spatula in a gigantic box, and the CEO of this company saw it and saw that their brand was being dragged, and went on a warpath and eventually found their way to the packaging engineers, and was yelling at them to fix it. Packaging engineers are terrified, never heard from a CEO before, and so that’s why they reached out to us. So that still happens.

If I were to generalize, in the US, they are generally coming to us because they’ve just finished optimizing some other part of their warehouse with robotics or automation, and they’re like, “All of a sudden, our pack-out looks pretty low-tech and is probably bottlenecking the whole process.” In the EU, typically, they will lead with, “We need to show that we’re making progress on emissions”—very different motivation.

The actual person buying our stuff in the warehouse is mostly trying to just take control of this process so they don’t have to think about it anymore. That is our typical pitch when we’re engaging with a VP of ops: This stuff will make sure you never have a problem.

Do you feel like there’s anything else that I haven’t asked or I need to know?

There are a lot of things about modern life that we take for granted, that when you actually have a profession that takes you deep into the details, it can be kind of depressing. Even just in the supply chain: Some of my peers that work on returns, the things that they tell me about the sheer scope of waste is fairly depressing.

This is the first moment in the 10 years that I’ve been working on this specific problem where I’m starting to feel hopeful about packaging. And—surprise, surprise—it’s because value and sustainability are aligning in certain ways…There are meaningful strides being made; they just don’t really get as much press because they happen over a longer time horizon.