by Max Sadler, on April 15, 2021
Whenever the topic of reusable packaging is uttered in corporate C-suites the typical reaction is: it’s too expensive, or it will take too long to ramp up, or the wait to see a return is too long. But the past two years have brought about a sea change in these attitudes, driven largely by studies that correlate higher sales and consumer preferences to sustainable products. In addition, the sustainability goals set forth by the Paris Climate Accords have been adopted by many corporations, all of which are making commitments to compliance standards that can require an overhaul of their operations and manufacturing processes.
But despite these new environmental targets, there remains the prevailing belief that those old attitudes are correct, especially that reusable packaging is too expensive – particularly when it requires changing shipping and logistics practices. But as more companies have implemented reusable solutions there is now plenty of data to prove that this is simply not the case. Read on to see the four ways companies are saving money with reusable transport packaging and realizing a return on their investment.
Key Benefits of Reusable Transport Packaging
Decreased packaging costs
No surprise here – when you use disposable packaging to transport your goods, you necessarily must purchase that single-use packaging every time you ship. With a reusable packaging management solution, you have the upfront costs associated with developing and manufacturing your packaging, but at that point, your packaging investment plateaus after the initial outlay.
Pallets provide a perfect example: wooden pallets have an average lifespan of 3-5 years, but plastic pallets have an average lifespan of 10+ years. More compelling is the usage rate: 11 trips for wooden before discarding versus 250 trips for plastic before recycling. While plastic pallets are three times more expensive than wooden pallets, the truth is that most companies do not recover their wooden pallets, so for three times the price, you get roughly 249 more uses. The cost differential speaks for itself.
Shipping and logistics efficiencies
Plastic pallets are only the beginning when it comes to reusable transport packaging types, and in fact, the most effective packaging solutions are those that are custom-built for your products. Custom shipping packages help to decrease product damage in transport but, perhaps more importantly, they can be created to maximize the space in shipping containers, allowing you to utilize the available space more efficiently and include more products per shipment.
Of course, there is also the investment in building out your reverse logistics needs in order to complete the circular supply chain that allows these packages to be recovered and returned for your reuse. But the investment in that side of the supply chain reaps its own rewards as you get more turns from each package, leading to exponential savings over time. Plus, this work can be affordably outsourced to firms with this infrastructure already in place.
Similarly, reusable packages can be made in ways that allow them to take less space inside warehouses and on the manufacturing floor, again leading to accrued savings. Toyota switched from cardboard to collapsible plastic shipping containers to transport their car carpeting at six facilities and quickly saw $3.5 million in annual savings from this change alone.
Reduced employee costs
The human benefits of reusable packaging are not to be overlooked: the time and hazards associated with managing and disposing of traditional packaging materials add up. The simplest example is again wooden pallets and crates, which often require repair. The time expended in that repair and the prospect that an employee will get injured, require time away from the job, and collect worker’s compensation are essentially eliminated with reusable packaging. Bay Area News Group made the switch to plastic pallets and saw $46K in annual savings from reduced labor costs, and a 125% return on their investment.
Likewise, PepsiCo found that broken wooden pallets would stop their production line, which translated to costs for labor, equipment downtime, and damaged products. Simply switching to plastic pallets eliminated $380K total in these costs per year.
Eliminated waste disposal
This, of course, is where sustainability and savings clearly intersect: eliminating single-use shipping products greatly decreases the amount of waste headed to landfills and the cost to get it there. In 2013, Tesla decided to move to reusable transport packaging solutions in their automotive supply chain, where they had been disposing of 317 tons of cardboard annually and over 50K pounds of plastic wrap per month. While the savings have not been publicly quantified, they reduced their waste footprint by 100s of tons per year, along with the costs of landfilling that waste.
The examples here can go on, but this is just common sense, and the calculation is simple: take the amount spent on disposal of transport packaging waste and essentially cross it off your budget. Once the other savings from this list are accounted for, very little of the cost of reusable packaging will replace that deletion.
Reusable Transport Packaging Benefits Your Business
These are just the top ways reusable transport packaging can cut costs, but making the switch to reusables has effects that ripple out across organizations, resulting in new efficiencies and savings where they may not have initially been expected. As word spreads about the undeniable results, sustainable supply chains will become the new norm in the corporate world, helping C suites hit their financial and sustainability goals at once – and no longer giving credence to those tired old arguments.
Looking to implement a reusable transport packaging program or save on your existing program? Contact us to learn how we can help!
