You don’t need bigger last-mile boxes. They could just “wrap” each item (or many items of the same SKU) in a reusable transport bin for its lifetime in the ware

You don’t need bigger last-mile boxes. They could just “wrap” each item (or many items of the same SKU) in a reusable transport bin for its lifetime in the warehouse; move the bins themselves around; and then pick the items out of the bin (or invert the bin right over a final shipping box) when they leave.