Tenneco Looks to CHEP to Expand Reusable Packaging Program to North America, 99% of International Shipments in Expendable Packaging

Tenneco expands relationship with CHEP, the importance of part density in logistical packaging, and addressing the dominance of expandable packaging for international shipments

Automotive parts supplier Tenneco Automotive is forging a relationship with CHEP Automotive to help it with its reusable packaging program, according to a recent report in Automotive Logistics, in a report that emphasizes the importance of reusable packaging in eliminating waste, as well as effective system design in improving container availability and part density. As the story is told by author Marcus Williams, Tenneco already had a relationship with CHEP at the time of the 2015 Automotive Logistics Global Conference, and Tenneco’s senior packaging systems analyst, Gary Southerland, approached CHEP to see what help they might offer the company’s North American operations. According to Williams, Tenneco was frustrated with container shortages at its North American operations, as well as being interested in a packaging approach which would generate less waste.

The edict to transition to reusable packaging had come from senior Tenneco administrators.

Given the size of the company, Tenneco ruled out a “big bang” approach for its North American operations, and worked with CHEP to start trials on a lane by lane basis. Buoyed by the success of those trials, demand from Tenneco operations to adopt the new system was high.

After assessing the success of the trials in January 2016, Tenneco elected to authorize full deployment.

Drew Merill, vice-president and general manager for North America at Chep Automotive and Industrial Solutions, emphasized the importance of capital, and the increasing reluctance of auto industry participants to invest it in non-core activities such as packaging. There is, he says, a strong interest in avoiding Capex in resolving the packaging problem.

For Southerland, the need is more visceral. It is about having the packaging on hand when needed to move parts. Container management is important, and integral to container availability.  

Merill states that 99% of parts moving on an international level still use disposable packaging, according to Williams. For Tenneco, single trip packaging posed probrlms in terms of space requirements and indirect labor to handle it. Triple stacking of pallets of corrugated packaging  was also cited as an issue.

Automotive parts supplier Mahle Behr was also included in the report. The company produces air conditioning and cooling units for vehicles. Martin Weiss, head of corporate logistics at the company emphasized the importance of packaging density. Case in point, his company had improved the density of an HVAC recirculation door through nesting and rotation to improve part density from 12 to 72 per container. A packaging investment of $38,000 resulted in savings of $135,000.

Mahle Behr also has substituted slip sheets for pallets in a move to increase cube utilization in containers. It boosted the quantity of evaporator units from 80 to 136 per container because the slip sheets enabled the addition of an additional layer of product. The result was a reduction in 600 fewer 40 ft. ocean containers annually, netting a $1.5 million saving.

Weiss reported that his company is now looking to employ RFID tracking along with better management practices. At one point the company lost $400,000 worth of containers. Tenneco’s Southerland also stressed that executives are interested in asset management and how reusable packaging is being tracked.