This is the first article in a three-part series by Jerry Welcome, formerly the president of the Reusable Packaging Association. This first article defines reusable transport packaging and its role in the supply chain. The second article will discuss the economic and environmental benefits of reusable transport packaging, and the third article will supply some parameters and tools to help readers determine whether it is beneficial to change all or some of a company’s one-time or limited-use transport packaging to a reusable transport packaging system.
Reusables 101: Defining Reusable Transport Packaging and Its Applications
Reusable transport packaging defined
In recent history, many businesses have embraced ways to reduce primary, or end-user, packaging. By reducing the packaging that surrounds the product itself, companies have reduced the amount of energy and waste that is expended. Now, businesses are also considering ways to reduce the packaging they use for transporting their products. The most cost-effective and impactful way to achieve this objective is reusable transport packaging.
The Reusable Packaging Association (RPA) defines reusable packaging as pallets, containers and dunnage designed for reuse within a supply chain. These items are constructed for multiple trips and extended life. Due to their reusable nature, they offer a rapid return on investment and a lower cost-per-trip than single-use packaging products. Additionally, they can be efficiently stored, handled and distributed throughout the supply chain. Their value is quantifiable and has been verified in multiple industries and uses. Today, businesses are looking at reusable packaging as a solution to help them reduce costs in the supply chain as well as meet their sustainability objectives.
Reusable pallets and containers, typically made of durable wood, steel, or virgin or recycled-content plastic, (resistant to chemicals and moisture with good insulating properties), are designed for many years of use. These sturdy, moisture-proof containers are built to protect products, especially in rough shipping environments.
Who uses reusable packaging?
A wide variety of businesses and industries in manufacturing, materials handling, and storage and distribution have discovered the advantages of reusable transport packaging. Here are some examples:
· Electronics and computer manufacturers and assemblers
· Automotive parts manufacturers
· Automotive assembly plants
· Pharmaceutical manufacturers
· Many other types of manufacturers
Food and beverage
· Food and beverage manufacturers and distributors
· Meat and poultry producers, processors and distributors
· Produce growers, field processing and distribution
· Grocery store suppliers of bakery goods, dairy, meat and produce
· Bakery and dairy deliveries
· Candy and chocolate manufacturers
Retail and consumer product distribution
· Department store chains
· Superstores and club stores
· Retail pharmacies
· Magazine and book distributors
· Fast-food retailers
· Restaurant chains and suppliers
· Food service companies
· Airline caterers
· Auto parts retailers
Several areas throughout the supply chain can benefit from reusable transport packaging, including:
· Inbound freight: Raw materials or subcomponents shipped to a processing or assembly plant, such as shock absorbers shipped to an automotive assembly plant, or flour, spices, or other ingredients shipped to a large-scale bakery.
· In-plant or interplant work in process: Goods moved between assembly or processing areas within an individual plant or shipped between plants within the same company.
· Finished goods: Shipment of finished goods to users either directly or through distribution networks.
· Service parts: “After market” or repair parts sent to service centers, dealers or distribution centers from manufacturing plants.
Pallet and container pooling
Closed-loop systems are ideal for reusable transport packaging. Reusable containers and pallets flow through the system and return empty to their original starting point (reverse logistics) to begin the entire process again. Supporting the reverse logistics requires processes, resources and an infrastructure to track, retrieve and clean reusable containers and then deliver them to the point of origin for reuse. Some companies create the infrastructure and manage the process themselves. Others choose to outsource the logistics. With pallet and container pooling, companies outsource the logistics of pallet and/or container management to a third-party pooling management service. These services can include pooling, logistics, cleaning and asset tracking. The pallets and/or containers are delivered to the companies; products are shipped through the supply chain; then a rental service picks up the empty pallets and/or containers and returns them to service centers for inspection and repair. Pooling products are typically made of high-quality, durable wood, metal, or plastic.
Open-loop shipping systems often require the assistance of a third-party pooling management company to accomplish the more complex return of empty transport packaging. For example, reusable containers may be shipped from one or many locations to various destinations. A pooling management company sets up a pooling network to facilitate the return of empty reusable transport packaging. The pooling management company may provide various services such as supply, collection, cleaning, repair and tracking of reusable transport packaging. An effective system can minimize loss and optimize supply chain efficiency.
In these reusable applications the capital utilization effect is high allowing end users to gain the benefits of reuse while using their capital for core business activities. The RPA has several members who own and rent or pool their reusable assets.
The current economic climate continues to drive businesses to reduce costs wherever possible. At the same time, there is a global awareness that businesses must truly change their practices that deplete the earth’s resources. These two forces are resulting in more businesses adopting reusable packaging, both as a solution to decrease costs and to drive supply chain sustainability.