By Paul Mendes
Reusable packaging such as bulk containers, handheld totes, and plastic pallets prove to be a more sustainable choice than standard one-way packaging such as cardboard and wood for a multitude of reasons. The major one being cardboard containers get discarded after each use, and wooden pallets often break and require constant repairs. Reusable containers, on the other hand, have much longer service lives, frequently outperforming the estimated number of trips placed upon them. Also, reusable containers help prevent bacteria and foodborne contaminants as they don’t harbor any moisture like wooden or cardboard packaging. Reusable alternatives not only cut down on wasted resources, but they also eliminate high costs for multiple purchases of new supplies and provide comparable service capacities.
The push to develop sustainable and efficient supply chain policies has prompted many companies to make the switch to reusable transport packaging. For supply chain managers working within closed loop systems, it is easy to see that reusable packaging supports their financial bottom lines and environmental impact goals. However, companies with more complex networks should not discount the possibility of replacing expendable packaging and witnessing the same benefits with a container pooling approach. Container renting and leasing systems are on the rise within the reusable packaging community and for good reason. They provide companies with a new option to reduce carbon footprints and improve profitability while removing the labor and capital commitment of owning.
The Benefits of Container Rental & Leasing Programs
One of the biggest benefits of reusable container rental and leasing systems is that they take the initial capital associated with ownership out of the equation. Rather than producing the entire cost for each container, companies have the option to either pay a monthly rental fee for as long as they use the product or pay a one-time trip lease fee which is calculated depending on the operation. This approach fits beautifully into the circular economy model as it allows companies to capitalize on the benefits of reusable packaging without having to pay for a product that won’t be in use year-round. Not to mention that these renting fees and leasing fees are considered an expense which can be deducted from your bottom line.
One of the beauties of third party container pooling and logistics companies is that they use a consultative approach to determine the best course of action for your particular situation. It is imperative to find a company in which you can trust to ensure you are proceeding with the most beneficial program that can be implemented seamlessly within your supply chain. One company that does this well is ContainerPal, a division of Reusable Transport Packaging, Inc. based in Saint Petersburg, Florida. Knowledgeable consultants advise you on how to best implement reusable programs, what products fit your supply chain needs best, and how to eradicate operational inefficiencies. Taking the time to understand your current supply chain situation and how to integrate reusable packaging in the most efficient manner will ultimately pay off and increase your return on investment.
Renting vs. Leasing
Participating in container rental programs grants businesses a degree of flexibility that contributes to cost savings and sustainability practices. Renting is often ideal for shorter durations, especially for agricultural operations. Some industries are dependent on external factors that modulate production volume, such as seasonal harvesting. Rather than perpetually storing the maximum number of reusable containers necessary, supply chain managers can rent varying numbers of containers when needed. One example of this situation is when fruit and vegetable growers experience a “bumper crop,”` which is when a harvest yields much more volume than was estimated. Rather than having to purchase a lot of bulk containers to fulfill this increased demand, container rental programs provide a viable alternative. Both short-term and long-term rental systems save on storage space, packaging costs, and wasted resources, as reusable containers will never have to sit idle.
On the other hand, companies have the option to pay-per-use, also referred to as trip leasing. This option is favorable when a shipper might not need the containers on hand but needs them for an individual project or for an undisclosed amount of time. The major benefit of this option is that you are charged a single all-inclusive fee for each container you rent. The pay-per-use model includes the delivery of the containers, pickup, cleaning, and tracking to ensure you don’t incur any hidden fees. Another way in which container pooling systems can benefit your particular application is through lease-to-own agreements. This option is similar to rentals; however, customers have the option to buy at the end of the lease, allowing for investment without front load capital outlay.
As you can see, renting or leasing can bridge the gap that is preventing you from implementing reusable packaging into your supply chain today. Taking that initial capital investment out of the equation opens up a realm of possibilities to streamline reusable containers into your operations. With the multiple renting and leasing options available, there is sure to be a right choice for your application. Overall, each one of these alternatives is helping more companies than ever to experience not only the cost savings that result from switching to reusable packaging, but improved business sustainability outcomes as well.
Paul Mendes is Marketing Coordinator at Reusable Transport Packaging