Transport Packaging Optimization Best Practices
If you’re looking for supply chain savings, start by looking for opportunities to improve your transport packaging.
Three Opportunities to Improve Transport Packaging
Transport packaging isn’t typically something you think about in supply chain management, but it plays a huge role in getting your products from manufacturing facilities in Southeast Asia to retailers and consumers in Europe and North America. Transport packaging optimized for the entire supply chain can have a significant impact on your bottom line. To start reaping the benefits of better packaging, start by looking for these three opportunities to optimize your transport packaging solutions.
1. Light-Weighting
You would hardly notice the difference of a few grams if holding “light-weighted” packaging in your hands, but you would notice the impact on your bottom line. Consider the thousands or even millions of packages you ship each year—at scales like these, even the slightest weight reduction can lead to serious savings in your supply chain. And with so many opportunities to lightweight your existing packaging solutions, your supply chain is rife with savings.
Light-weighting is typically accomplished by replacing packaging materials and/or components with a lighter alternative. For example, a glass bottle may be replaced with a flexible plastic pouch, or plastic handles may be replaced with corrugated hand slots. There’s also Billerud Flute®, an extremely high-strength semi-chemical fluting that can replace conventional wood packaging and bring about significant savings for brands that ship wooden crates. Billerud Flute® can also replace double-walled board with a lighter-weight single-wall substitute.
As a matter of fact, within the corrugated packaging market, one of the key growth drivers is the increased demand for lightweight packaging. According to procurement research analysts at SpendEdge, the demand for lightweight packaging is increasing mainly because companies are focusing on reducing the overall weight of the packaging to reduce the transportation cost:
Reduction in packaging weight will allow suppliers to transport more packaged in a single shipment, which in turn will reduce the overall transportation cost.
Along with supply chain savings, light-weighting can also help you connect with the growing number of eco-conscious consumers. Globally, the Billerud Consumer Panel found that 64% of respondents (based in 16 megacities around the world) indicated that they may change a product/brand for another if it clearly provides a more sustainable choice. According to one study, 65% of consumers said packaging products in a sustainable and environmentally friendly way is important for demonstrating commitment to sustainability. For brands that look to minimize the impact their packaging has on the environment through engineering and optimization efforts such as light-weighting, the ROI may also be measured in terms of telling a better “sustainability story” that resonates with more consumers.
Note: Lightweight paperboard may not be as thick, so feasibility testing must be done to verify that the new material/design withstands the same force.
2. Eliminate Empty Space
Light-weighting can also be accomplished by reducing the amount of packaging material used. This is where packaging engineers employ the art and science of “right-sizing” to minimize the amount of empty space (air) inside transport packaging. According to a packaging study conducted by Peerless Research Group on behalf of Logistics Management and Modern Materials Handling, respondents estimate that, on average, "20% of each box or container shipped is made up of unused or vacuous space, or area not taken up by the actual item being shipped.""
A thorough analysis should consider every part of the package system—how well products fit inside primary packages, how primary packages fit inside master outer cartons (MOCs) and how MOCs fit inside tertiary packaging. By eliminating void space, you can effectively fit more products inside fewer shipping containers. In one example, a new packaging design decreased the number of shipped containers by 12% and resulted in $1.2 million in freight cost savings in just the first year. Right-sizing can also reduce or eliminate the need for void fill materials, resulting in additional cost savings.
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3. Design for Distribution
According to a 2017 white paper by the American Institute for Packaging and the Environment (Ameripen), products are handled an average of five times in a traditional retail supply chain; in the e-commerce network, products may be handled 20 times or more. The white paper also states that replacing a damaged product can cost e-commerce vendors up to seventeen times more than the original cost to ship (accounting for return shipping costs, re-issue or reimbursement, warehouse labor, additional packaging supplies and the cumulative environmental impact, among other quantifiable costs). Damaged packaging can also result in lower customer lifetime value. Research has found that 73% of consumers who received a damaged shipment are unlikely to order from the same retailer again.
The idea of “designing for distribution” aims to minimize product damage by mitigating the risks of supply chain hazards. By tracing the entire product journey end-to-end and understanding what conditions are experienced along the way, packaging designers and engineers can create appropriate solutions that stand up to these various distribution hazards, including:
- Rough handling, dropping or falling off machinery
- In-transit/warehouse stacking
- Loose-load vibrations
- Temperature and humidity
Designing for distribution can also help brands reach true packaging optimization. According to the Innventia AB Model (formerly known as the Soras Curve), true optimization is achieved at the intersection of the total cost and cost-of-damage curves. Movement up or down one trajectory generally results in an inverse movement along the other. Packaging designed for your supply chain and the actual hazards encountered along the way from origin to destination prevents additional material costs and environmental impacts from overpacking.
At Billerud, we look at the entire supply chain to identify where improvements can be made when developing new packaging solutions for our clients. Our focus on designing packaging solutions and processes with the entire supply chain in mind is what sets us apart, and what drives operational savings for the brands we work with. Discover how much you can save with better packaging.
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