This is the default step and will execute the following: -

• Retrieve item contents from the source and combine that with Item Manifest for that item. 
• Based upon package size settings, a set of these items will be placed into a package and a request sent to upload then to Azure Blob Storage.
• Send notification to SharePoint to request that package is ingested.
• SharePoint will process notification and ingest item packages into target.
• Client will display progress

Packaging is the terms used for a technique used by PMA to improve migration performance into SharePoint.  During migration, items are grouped together into packages and these packages are then uploaded into Azure.  SharePoint will then process these packages asynchronous.  Package verification is a process that PMA executes from time to time during migration to check the current status of any uploaded packages.