Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
Now that sustainability has entered the mainstream, more companies are looking at whether their operations might be a good fit for reusable packaging. Indeed, according to Jerry Welcome of the Reusable Packaging Association (RPA), the industry has seen annual growth of 10 percent over the past few years.
According to RPA, reusable packaging includes reusable pallets, racks, bulk containers, handheld con¬tainers, and dunnage made of durable materials such as metal, plastic, or wood. (A cardboard box, although it could be used more than once, would not be considered reusable packaging.)
The benefits of using reusables are manifold, experts say. They can reduce a shipment's impact on the environment. They are more cost-effective than buying one-way or nonreturnable packaging. They are typically stronger and easier to clean than their single-use counterparts. Finally, there's the aesthetic appeal. Reusable packaging usually looks better and often takes up less warehouse space because it is usually stackable and collapsible.
But for all the positives, reusable packaging does not make sense for everyone. Reusable packaging is not cheap, so to get a return on these assets (or to justify the fees if the units are rented from a pooler), a company has to make sure that it can get the packaging back. "You've invested the capital, the time, and the labor resource," points out Lisa Knight, director of marketing at Container and Pooling Solutions (CAPS). "If you are not able to get those [assets] back, you're going to be in some trouble."
For that reason, reusables tend to work best in a closed-loop system, where the units are exchanged among the same few parties, says Knight. She notes that there are circumstances under which reusables can work in nonclosed-loop environments—for example, if all of the end users' facilities are located close together, you could set up a regular milk run to retrieve the units. But even under such an arrangement, it would still be necessary to have a tightly controlled supply chain with a limited number of participants, she says.
But even if you have a tightly controlled supply chain, a reusable packaging program is not always a slam dunk. You have to put some thought into the program's setup. What follows are some steps you can take to make reusable packaging work for your company:
1. Calculate closely how many assets will be needed. To determine your asset requirements, it's important to know not only how many shippers are in the system but also the assets' cycle time. How long will it actually take to get reusable containers or pallets back from the end users? How many should be returned at one time? Is it worthwhile retrieving five or six containers or pallets, or should the return be postponed until a full truckload is built? Other questions center on the consistency of packaging volumes and whether there's a peak season for the packaging. Understanding all these factors will ensure the right amount of containers or packaging units are on hand and avoid the need to pay for expedited shipping from the end user, says Knight.
2. Conduct a lifecycle analysis. It is naïve to automatically assume that reusables will be cheaper or greener for the business, says Jack Ampuja, founder of the packaging advisory firm Supply Chain Optimizers. For that reason, he urges managers to perform a detailed eco-analysis tailored to their specific enterprise.
"Go back to what the original raw materials are and how they are converted into the packaging product, [and] look at how they come to your system, how they are transported, what you do with them," says Ampuja.
Ampuja adds that it's important that the analysis cover issues surrounding the packaging product's end of life. For example, many reusables are made out of plastic. "But plastic doesn't just disappear when its life is up," he says. "The [units] can be recycled, but in many ways, they can be much harder to recycle than paper."
3. Get supplier/customer buy-in. There are some cases where companies are only using reusables to ship between their own facilities. Most of the time, however, the items are being shipped back and forth between the company and one or more of its suppliers or customers.
In those cases, make sure suppliers or customers are on board with the reusables initiative. "Don't go down the path of doing the conversion [from nonreusables to reusables] without making sure your suppliers or customers understand what they are doing and the objectives behind it," says Norm Kukuk, vice president of marketing for Orbis Corp., a reusable packaging supplier.
One way to get partner buy-in, says Kukuk, is to show how reusable packaging will help them reduce overall costs. Another possibility, he says, is to point out how reusable packaging could support any objectives they may have, such as complying with new food safety requirements from the Food and Drug Administration.
Before you select a type of packaging, Kukuk recommends getting a customer's and/or supplier's input on how they would like to implement a reusable program. Ask them how they'd like to receive the packaging and return it and how they'd like their employees to pick out of the asset or place items into it.
4. Manage the assets. Reusable packaging is inherently valuable and can cost anywhere from $60 to several hundred dollars per piece. In order to get the most from these assets, companies must have processes in place to track, return, clean, repair, and eventually recycle or dispose of the material.
A pooler can help with the nuts and bolts of tracking and maintaining the assets. For example, many poolers will provide their customers (and their customers' partners) with scanners and systems to track assets. They will also ensure the assets are returned in a timely manner and that they are cleaned and repaired.
But contracting with a pooler doesn't mean you can simply step away from the operation; customers still have to be actively engaged in the process. "You need to understand [exactly] how you're going to be charged and who is responsible when one of these valuable pallets or totes goes outside the system or is broken," says Craig Densmore, a consultant with Supply Chain Optimizers and a professor of packaging at the Rochester Institute of Technology. "You don't want to receive a bill for a million dollars from the pooler because you can't account for reusables that they say are in your possession. It does take some administration from both sides."
It is also critical that your suppliers or customers play an active role in managing the fleet of assets. "Don't allow them to sit on inventory," says Kukuk. "Make sure you've detailed exactly how much they are allowed to keep on hand. Without that, you can get into a situation where your suppliers or customers are just building up buffers of packaging, and you find that your fleet is not turning over as fast as it could be."
That's a situation you definitely want to avoid, says Dave Mabon, head of contract packaging for third-party logistics service provider Genco. For cost reasons, you need to get as many turns as possible from each asset, he says.
5. Train, train, and train some more! To get the most out of the investment, employees must be properly trained on how to use and care for the asset, says Densmore. That might mean, for example, making sure associates know how to collapse and/or stack the items for maximum cube utilization when they are in return mode, he says.
6. Periodically reanalyze your packaging needs. Companies should recognize that as business conditions change, they may also have to adjust their packaging. For example, a business that has recently automated its operations might find it has to switch to a different type of reusable packaging. Or as the type of product being shipped changes, a company may need to switch to bigger or stronger containers.
The important thing, according to Kukuk, is to have procedures in place to ensure your program is re-evaluated on an ongoing basis. Companies with successful reusable packaging programs, he says, are continually "rightsizing" their packaging to make sure they are using the right packaging for the right application.
How to handle your used corrugated
For all reusable packaging's benefits, it's hard to beat the allure of cardboard. The cardboard box is cheap, easy to obtain, and easy to recycle. It's also versatile: According to Jack Ampuja, president and CEO of the packaging advisory firm Supply Chain Optimizers, a typical corrugated cardboard box will work extremely well for two-thirds of all packaging applications.
But if you do use cardboard boxes, you have to have a plan in place for handling the excess (also known as old corrugated containers, or OCC). If you don't, it can create serious bottlenecks in an operation, says Mike Connell, sales manager at Balemaster, a manufacturer of balers. "A distribution center usually requires several people to handle its excess corrugated," he explains. "Boxes are cut down or flattened and bundled on pallets. It can be a very labor-intensive task."
In most cases, Balemaster says, you will need a baler at your site so that you can create bales that will be sold to a paper broker for recycling. "With an automatic baler, the boxes are simply fed into the baling chamber where they are compacted quickly into a tight bale that can be recycled," Connell says. "The benefits of using a baler in a DC include generating revenue by selling bales to a recycling company, eliminating the cost of hauling the excess corrugated to a waste yard or landfill, and being environmentally friendly."
But you have to choose your baler carefully. There are several different kinds of machines on the market, so selection is not always a simple matter, explains Tade Mahoney of American Baler Co. The wrong choice could prove costly, he adds. "You have to be really careful because balers are expensive to put in, and they're expensive to take out. So operators of distribution centers have a responsibility to provide [their baler vendor] with accurate information."
That information includes what type of boxes the baler will be handling (for example, whether they're single-wall or double-wall corrugated), the size of the boxes, the carton-per-minute flow rate (both during average and peak times), and the percentage of broken-down boxes versus setup boxes that will be tossed into the baler. "From that, we determine how big a baler you need, how big a charge box (the chamber below the hopper and in front of the ram that holds material before it's compressed) you need, and how fast the ram (the plate that compresses the corrugated) has to cycle," Mahoney says.
Many DCs can get by with a 60-inch charge box, an eight-inch cylinder, and 50 to 75 horsepower, according to Mahoney. "But that's not good for everyone," he emphasizes.
Companies may want to consider other features for their balers depending on their operation. For instance, a high-volume operation might want a baler that can tie bales automatically (which can save two to 10 minutes of time over manually tying a bale), while a site looking to cut its energy costs might want a baler that turns off when idle. Alternatively, a baler with dual pumps and motors might be a good fit for a DC that can't afford a total work stoppage—that's because if one of the pumps or motors breaks down, the machine can continue to operate at a slower speed. Finally, a really large DC may find that a baler cannot keep up with the amount of excess corrugated it churns out. In that case, it may want to install a shredder over the baler.
Repeat user
When dairy product company Fairlife switched from using fiberboard containers to plastic reusuable totes for shipping milk to grocery chain Kroger, the benefits were immediately noticeable.
"It was cheaper, cleaner, and easier for the end customer to deal with," says Hans Maron, Fairlife's vice president of operations.
The fiberboard containers, which cost around $100 apiece, had to be recycled after one use. In contrast, the reusable totes, which Fairlife rents from pooler CAPS, can be used 50 to 60 times before they need replacement. "Totes, as long as they don't get damaged, have a life of three to four years," says Maron.
The main reason for Fairlife's switch to reusables, however, was ease of use. The totes are easier to fill and empty than the fiberboard version. They're also stronger. With fiberboard, according to Maron, there's more of a risk of a forklift tine's puncturing the packaging. Additionally, if the fiberboard is stacked, it can get pinched and start to leak. The totes, on the other hand, can be stacked 10 to 15 feet high.
Furthermore, CAPS has made leasing convenient for Fairlife. As part of its service, CAPS picks up the totes from the Kroger facility, cleans them, wraps them in plastic, and returns them to Fairlife.
There were a couple of factors that made Fairlife a good candidate for reusable packaging. First, the company had a closed-loop supply chain. It ships out filled totes from a single Fairlife location to a single Kroger location, where the milk is processed to make the grocery chain's own branded Greek yogurt. Second, the company had the shipment volume and consistency (300 to 400 totes per month) to make returns economical. "If you have lower volumes and they don't turn often, you're going to end up paying more to make sure they don't accumulate as much at the end user," Maron explains. "With higher volumes—because you can fit about 108 totes in a trailer—you're able to take full truckloads, which cuts back on shipping costs."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.