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Shipping Automation

Originally published on February 25, 2020 by Logiwa Marketing, Updated on May 30, 2024

4 Things To Know When Adding Shipment Rule Automation to Your Warehouse

Shipment rule automation: three words that together can have a huge business impact. If you’re planning to introduce shipment automation software into your warehouse, this article is for you.

Let’s dive in.

What Is Shipping Automation?

First, let’s define shipping. Shipping is the process of preparing, packaging, and loading products for placement onto an outbound truck for delivery to a customer.

The shipping process includes everything from choosing which carrier to use to preparing the correct documentation to printing the shipping label.

As you can see, there are a lot of steps involved in shipping. More specifically, there are a lot of decisions involved in the shipping process. And whenever decisions come into play there is the potential for all sorts of complications.

Workers have to make judgement calls and strike a balance between efficiency (following a predetermined system) and protecting business value (inspecting products or adding elements like insurance).

Even if workers are trained on when to deviate from the standard procedure (e.g., purchase insurance if the value of a product exceeds $200 or call a shipping manager for a pre-shipment inspection for items over $2,000 in value), it still takes time to assess each situation.

And in the eCommerce fulfillment business, where every delay can impact customer satisfaction and labor costs, these extra steps and decisions add up.

Shipment rule automation assigns the lion’s share of these tasks to your shipping software. For instance, if you’ve decided that all items valued over $200 require insurance, the software will automatically execute this task in the system. A worker does not need to scan the order, find the order value, and purchase the insurance. It’s completed automatically.

How Does Shipment Rule Automation Work?

The logic of shipment rule automation is “if/then” statements.

If the value of a product exceeds $200, then purchase insurance from the carrier.

The “if” statement serves as the condition (the evaluation and decision-making process an employee would need to make) while the “then” statement serves as the action the worker would have taken.

Fortunately, warehouse managers don’t need to code these systems and logic statements into their warehouse management systems (WMS) themselves. Instead, their shipping automation software presents a user-friendly settings page where they can use checklists, drop down menus, and fields to select the conditions and actions for their shipment rules.

In most shipping automation tools, rules are executed based on a hierarchy. If there are multiple rules, the rules are executed in sequence. When applicable, rules higher up on the list override rules lower on the list.

What Are the Most Popular Types of Shipping Automation Rules?

Warehouse managers use several shipping rules to streamline their operations. The following are some of the actions (the “then” portion of the “if/then” statement) that warehouse operators assign to their shipping automation rules.

Action Description
Add customer tags Assign identifiers to specific orders. For instance, a customer may be a VIP member of your eCommerce store, which qualifies them for free shipping or a reduced rate.
Add order tags Assign product identifiers to specific orders. For instance, you may want to tag orders as “Fragile” or “Heavy” based on specific criteria.
Add to order weight Assign a weight to your order based on your previous shipping history (e.g., you’ve shipped that same product multiple times in the past).
Assign category If you want to divide your products into different categories (e.g., carrier categories, holiday promotion orders) you can set an action to assign categories based on predetermined criteria.
Assign to user If one account has multiple users, this action automates the process of selecting the right user.
Break out & split by SKU Suppose a customer orders multiple items, but one of the items in the order (identified by the SKU) needs to be shipped individually. This action will ensure that item or SKU is separated from the original order mix and shipped separately. This action results in two orders at minimum.
Clear order Used to identify old orders that have been accidentally re-downloaded and can be automatically deleted.
Create scan-based return label for outbound shipment A highly useful and common shipment automation rule that makes it easy for e-retailers to prep packages for shipment.
Set packing slip template If you don’t want to customize your packing slips, your shipping automation tool can automatically generate one for you.
Set shipping preset You can automatically assign a specific configuration (e.g., carrier, service type) based on predetermined criteria.
Set saved recipient billing Assign the appropriate billing method to the package based on the recipient’s account details.
Set saved third-party billing If someone other than your company or the recipient will be paying for the shipment, you can automatically assign those account details to the order.
Set ship from address If you have multiple warehouses and would like orders to be processed from a specific location, you can automatically assign packages to be shipped from one of your facilities.
Set shipment insurance based on pre-determined amount If you want all purchases worth more than a predetermined amount to have insurance, this action is helpful.
Set shipment insurance based on order total In this case, purchasing insurance doesn’t depend on the value of individual items but on the total value of all items in a specific order. This is a perfect example of how shipment rule automation optimizes the shipping process and limits the amount of decision-making warehouse workers have to do.
Split order items If orders can’t fit into one package or need to be handled separately, this action can help automate the process of splitting out order items based on predetermined criteria (e.g., dimensional size of all the items in the order).

What Specific Problems Does Shipping Automation Solve?


It isn’t difficult for warehouse managers to present the business case for shipping automation technology to executives. Shipment rule automation delivers benefits that directly affect a warehouse business’s top and bottom lines.

FREE DOWNLOAD: Before you read further, download our Packing Slip Excel Template and start printing your packing lists today.

Increased Capacity to Win and  Manage New Business

Inefficient processes hurt more than your bottom line. They hurt your top line – your revenues and gross sales – as well.

A poor quality of in-house systems hinders your ability to take on new customers or pitch your services to others.

In some cases, companies can work around this by winning the business first and figuring it out later. But this is a bad idea. Hastily implementing new technology to please one customer may be a suitable short-term fix, but it can cause issues in the long term. Consider how a hasty capital investment in a conveyor belt system may not be a good long-term investment based on the existing customer base, for example.

In other cases, companies take on the work and fail to meet the expected service level. This not only damages the relationship with the new customer, it negatively impacts the company’s reputation in the marketplace and potentially alienates their current customer base whose service levels may have suffered.

The smarter option is proactive, carefully planned changes that enable your business to increase its customer base without overloading its systems. A shipment rule automation tool does this by making it faster and easier to prep and ship items for more brands to a greater volume of customers.

Helps Warehouse Managers Prioritize Their Time


It’s impossible for every outgoing package to be closely scrutinized by warehouse employees. While processes are put in place to catch as many deficiencies as possible in the least amount of time, There are some instances where a warehouse manager or shipping manager wants to take a final look before a product goes out the door. For instance, a supervisor may want to sign off on a high-value item before it leaves the warehouse to ensure the order is accurate and undamaged.

Shipment rule automation makes it easier to flag these exceptions. Warehouse workers do not need to individually assess whether an item is valuable enough to call a supervisor–the  system automatically flags the item, prompting warehouse workers to set it aside for final inspection.

This automation rule doesn’t only apply to expensive items. Shipping managers may also want to inspect items that are fragile or that have special handling requirements. Whatever the prerequisite is, identifying it is left to the software, not the warehouse worker.

Keeps Your Inventory Levels Healthy

The longer you hang on to inventory, the more money you spend taking care of it. Getting your products out the door as quickly and accurately as possible limits the inventory on your books, keeping your inventory levels (and your cash flow!) healthy.

Shipment rule automation also keeps your inventory safe. The longer your inventory sits around unsecured – like in a staging area waiting to be prepped and packed for shipping – the higher the chances of spoilage, damage, loss, and theft. A shipment rule automation system limits the length of time valuable goods spend in limbo. Once an item leaves inventory, you want it on a truck to your customers.

Improves Shipping Times

eCommerce companies can’t afford to drag their heels when it comes to shipping. Customers expect three-day shipping at most and same-day shipping at the least. As a result, a delayed  delivery due to a cumbersome shipping process is not ideal.

If you’re a 3PL, tidying up your shipping process is essential because your customers rely on you to use best shipping practices in your operation. Failing to use the latest tools to streamline your shipping processes can cost you one customer at best and your reputation at worst.

Streamlines Dropshipping Operations

As the world gets smaller and internet penetration rates increase, dropshipping has become an incredibly popular business model. But there are challenges when it comes to managing a dropshipping operation.

One of the biggest challenges is transferring incoming orders to your wholesaler’s order fulfillment software. When you’re managing a low volume of dropshipping orders, this isn’t a problem. When you have an influx of customers, manually transferring addresses can grind your fulfillment to a halt.

Shipping automation tools also offer order splitting for cases where one customer’s order includes multiple products from different vendors. The order is split up and each item is pushed to the appropriate vendor. They are fulfilled separately, but they both ultimately arrive at the same customer.

Dropshippers can focus on marketing and selling products while the shipping automation tool takes care of the rest.


Helps Reduce Some of The Most Common Shipping Errors

According to Pitney Bowes, the global mail technology company, a poor shipping workflow can lead to several common – and costly – shipping errors. Many of these can be prevented with shipment rule automation, including:

  • Choosing the wrong mail class: If your company chooses the wrong mail class (e.g., the United States Postal Service’s Priority Mail versus First Class Mail), you’ll wind up underpaying and having the shipment returned or overpaying and losing money over the long term. Shipment rule automation helps you set rules that select the mail class based on the product’s weight.
  • Not taking dimensional weight pricing into consideration: Most carriers now include dimensional weight pricing in their pricing models. Shippers who don’t take this into consideration can make costly mistakes. Shipping automation removes this responsibility from warehouse workers.
  • Using the wrong boxes: Choosing an unnecessarily large box is often considered a harmless mistake. But larger boxes cost the warehouse money and these costs add up over time. Plus, dimensional weight pricing means the shipping price will go up, too. Shipment rule automation can direct warehouse workers to choose a specific type of box, rather than engage in guesswork.

Introducing Shipment Rule Automation is a Relatively Small Change With Big Impact

When people think of supply chain automation, they envision expensive robots, conveyor belts, and guided vehicles. But there are other ways to introduce automation into your warehouse without incurring huge upfront costs. Implementing automation software with shipment rule automation reduces decision making and manual intervention and gets your products to your customers quicker and  more cost-effectively.

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