Returnable Logistical Packaging

The new trends in logistical packaging today are the use of returnable containers. Returnable pack­aging (RP) is used in consumer durable and automobile manufacturing industry wherein the sup­pliers are located in proximity of the assembly plant. Over the past two decades, the automotive industry has switched over from using disposable packaging to reusable plastic storage boxes and metal packaging. This reduces costs and suits the just-in-time, lean manufacturing required in the industry today (Figure 9.11).

The automotive industry takes its environmental responsibilities very seriously, and has made great efforts to create a waste-packaging free environment. For this reason, it has pioneered the use of returnable transit packaging, probably more so than any other industry. Plastic storage boxes used in packaging for the automotive industry are generally oil-based, either Polypropylene or Polyethylene and are 100 per cent recyclable.

RP can cost substantially less than disposable packaging. RP saves both purchase and dis­posal costs. The use of returnable packaging upsets the traditional cost allocation balance. It requires a large investment in containers, additional transport costs and an infrastructure for empty container sorting, as well as systems for management and quality control. However, the benefits of RP are the elimination of disposal costs and the need to repeatedly purchase packag­ing. There are also operational benefits. RP can be designed to make products and packages, which are easier to pack, handle, stock and unpack. They can facilitate the use of automation. Sometimes they can even reduce logistical operation costs, since they are designed to optimize transport and storage cube.

RP increases control, reduces transport cost, and minimizes the required safety stock of contain­ers. All this helps to consolidate the number of suppliers and reduce their geographical distance from the customer. Hence, the new trend in supply chain optimization is favourable for returnable packaging applications.

Managing a fleet of returnable containers is harder than it looks. Companies which excel in in-bound and out-bound logistical arrangements have not been so successful when it comes to managing their container fleets. Containers are routinely misdirected or lost, and they are rarely tracked in system-wide information systems. Yet it is vital to control such a large and constantly moving investment, to make it meet supply and demand needs. The number of containers needed can be increased by several factors: longer stockholding by the receiver, reuse of the packages by the receiver, the receiver passing packages to another user, and failure to collect the empties and get them into a condition for reuse.

Return transport costs also depend on the configuration of the packages. Some are designed to nest or collapse when empty, which can minimize transport cost depending on whether or not the returning trailers or boxcars are full. The number of containers to be returned at one time is an important consideration. If containers need to be returned at less-than-truckload (LTL) rates, the transportation cost can be very high. However, it may not make sense to stockpile empty containers, until a full truckload can be shipped, as this requires more containers.

Another trend in logistical packaging is ‘Modular packaging’ (Figure 9.12). A modular pack­aging system for shipping and displaying palletized products comprises vertically stacked trays for holding the products. Tubular spacer sleeves located over openings in each tray are formed such that their hollow interiors communicate with the openings. Support posts are inserted inside the spacer sleeves and through the tray openings to lock the trays together. The system is strong enough not only to support the weight of the products on the trays and withstand the vibration and impact forces that can occur during shipping, but also to withstand the weight of one or more units stacked on top. The aim of the modular system is to tailor the various techni­cal components in the transportation chain such as packages, cargo units, pallets, containers and transport vehicles to each other. It helps to optimize the economic viability and safety of transport operations.

Packaging sizes are in particular adjusted to the internationally accepted standard pallet dimensions of 800 mm X 1200 mm and 1000 mm X 1200 mm. Using pallet dimensions has the economic advantage in their form of better utilization of payload area. Furthermore, there are tech­nical advantages also because the cargo may accordingly be secured readily and safely on the pallet.

Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.

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