Warehouse Repackaging: The Problem, Solutions

With a package’s long journey to consumers, warehouse repackaging is an extra step that can cost you more money.

Every day, billions of boxes move at breakneck speeds from production plants in Southeast Asia to their final destinations in Boston, London, Toronto and cities around the world. Goods such as T-shirts, laptops, baking trays, tents, components, and running shoes flow 24/7 from factory floors to transit points to docks and warehouses in cartons designed for shipping and handling.

Packaging risks and pitfalls

Potential for packaging pitfalls — with so many touch points along the lengthy journey from Southeast Asia — is extremely high. On a typical trip, packages encounter a wide range of weather conditions such as high and low temperatures, and varying humidity levels, as well as jostling and pressure. Goods in transit may experience tilt or drop damage from containers and vibration from conveyor belts. Boxes may crush when stacked and racked in the DC or in transit from the origin. Products on loading docks are vulnerable to damage by forklifts and bumpy terrain. Packaging Digest estimates that up to 11% of unit loads arriving at warehouses show some signs of case damage. The average rate of damage is 2%.

With a package’s long journey to consumers, warehouse repackaging services are an extra step that can cost you more money. “What can be done?” is on the minds of many in global operations looking for quality, savings, agility, positive brand management and ways to deal with damage and handling issues.

The true cost of warehouse repackaging

The global cost of repackaging services are $26 billion US, a figure set to reach nearly $50 billion U.S. by 2022, according to Packaging Digest. This comes directly from the cost of labor, return costs, the price of materials, the cost of lost or damaged product and transport and shipping costs. 

Beyond hourly labor costs, warehouse repackaging services also have less obvious costs. If you are frequently facing damaged packaging at warehouses, you’ll need to invest in quality assurance and inspection to make sure no damaged products are making it to consumers. Managing your warehouse resources is indirect labor; when there are fewer people working in a distribution center, the need for warehouse repackaging services takes hands away from other tasks. 

You’ll also need to invest in solutions. Discovering what is causing product damage along your supply chain isn’t easy. It takes hours of investigation searching for the root cause and management hours dealing with the headache of finding an error in the entire package timeline.

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How packaging can reduce the cost of warehouse repackaging

Specialized packaging — both internal and external — protects the integrity of the product as it moves through the distribution chain. The ultimate goal of every supply chain manager or product manager is to develop, implement and monitor supply chain management activities needed for the timely transportation and distribution of products for shipping. This means deploying effective planning strategies for packaging such as ensuring packages are shielded from damage, but avoiding added costs.

Strong and durable packaging protects the product from getting damaged in the first place. Easy to handle, correctly-sized packaging reduces inefficiencies and waste. Proper design of cases, geared specifically towards repacking, contributes to material and labour cost savings of 25% to 30%, according to Packaging Digest. 

Some of the savings in packaging strategies are found in the elimination of excess air space, resulting in more products being shipped in fewer shipping containers. Durable master outer cartons (MOCs) can be used again in second-leg trips to destination markets. Reusing packaging at the distribution center can save millions.

Primary product packaging for retail display has a greater chance of staying intact inside MOCs so products arrive at retail destinations shelf-ready when high-quality corrugated materials are used. Reducing returns, repairs, and inventory losses is a  direct benefit of investing in greater quality materials and design.

The future of warehouse repackaging services

In the future, we will see more products being shipped in fully automated distribution networks, according to Logistics Management. Automated or semi-automated warehouses already have different packaging needs and costs than staffed warehouses, including the way warehouse repackaging services are handled. 

No longer will warehouse personnel identify contents through barcodes or QR codes and RFID tags — this will be done seamlessly by robots. Manual repack divisions have typically conducted the repacking by hand, transferring commercial packaging to packaging more suitable for retail use/residential homes. 

In an automated facility, products imported or packed by industrial manufacturers are repacked autonomously before they are shipped to consumers. This trend places a greater onus on the need for carton systems that are easily manipulated by automatic handling systems.

Manage your distribution center better

There are multiple direct and indirect costs associated with warehouse repackaging services and new technology which will force companies to adapt. Inefficiencies are costly if not managed or left unidentified. Fortunately, there are solutions to minimize warehouse repackaging issues. 

Careful packaging design and engineering is a promising antidote to damage and handling issues, especially if supply chain variables are factored into the development process from the beginning. Good packaging can increase logistics performance and reduce the likelihood of compression, tearing, or other deterioration from careless stacking or temperature and humidity changes.

Efficient warehouse repackaging services are vital to your supply chain. Billerud can help you reduce supply chain inefficiencies. Our packaging engineers simulate damaging incidents on custom package prototypes, so your packages will be protected through the hassle.

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