Over the last decade, corporate sustainability has taken center stage—particularly around packaging. As consumers became more engaged and informed about environmental impacts of product packaging, companies responded with a greater focus on recycling and carbon footprint initiatives.
Since then, those efforts transcended the business-to-consumer arena into the business-to-business (B2B) realm where reusable packaging remains a focal point for companies and their supply chains.
Companies are finding financial, operational, and environmental benefits of utilizing reusable packaging over expendable packaging options.
What is the environmental impact of reusable packaging? The Reusable Packaging Association (RPA) provides these statistics:
- A single reusable packaging item reduces solid waste by up to 86% by eliminating hundreds of single-use packaging items from entering the landfill.
- The energy used to manufacture reusable packaging items is 64% lower than the manufacturing and recycling of single-use packaging.
- Reusable packaging can reduce greenhouse gas (CO2) emissions up to 60% by eliminating the need to recycle or remanufacture the item.
These benefits and others are contributing to the growth of the reusable packaging market.
Plastic Reusable Packaging Dominates
A Grand View Research (GVR) market report states that in 2020, the global returnable packaging market had an anticipated compound annual growth rate of 5.4% between 2020 and 2027.
Reusable or returnable packaging can be found in three material types: plastic, metal, and wood. Plastic accounted for 63% of the market revenue of reusable packaging in 2019, with high-density polyethylene (HDPE) and polypropylene (PP) used predominantly for crates, pallets, and intermediate bulk containers.
Industries prefer plastic because of its durability, resistance to chemicals, and ease of sanitization. GVR reports that automotive uses returnable packaging for the transport of semi-finished and finished auto components. Food and beverage relies on reusable plastic packaging for dairy, bakery, and semi-processed and processed food products.
Plastic reusable packaging provides companies and their supply chains with several advantages.
Trends Shaping Reusable Packaging
While SSI SCHAEFER leads the way in automated material handling applications, it also supplies an extensive array of innovative reusable packaging from handheld containers to bulk bins to pallets and top caps. The company is also an OEM-approved supplier to tier 1 and tier 2 automotive parts manufacturers.
The company’s reusable packaging is utilized by a variety of industries including durable goods, automotive, agriculture, distribution, heavy-equipment, recreation vehicles, manufacturing, government, electronics, and even food.
Brandon Hoots, national sales manager within the SSI SCHAEFER packaging services division, says automotive is a primary customer of the company’s reusable packaging systems. The three biggest reusable packaging trends affecting his automotive customers are return on investment, sustainability (reducing the carbon footprint), and operational efficiencies.
Return on investment. Most automotive programs are vehicle launches, meaning from start to finish it’s a five- to-seven-year term. Hoots says most of the SSI SCHAEFER reusable packaging systems pay for themselves within the first year.
“After the first year, it’s adding profit to the top line for our industry and OEM customers. While brown box is substantially less per unit, after four or five shipments the fleet is paying more than the upfront purchase of returnable packaging. It eliminates that onetime use, repeat buy of brown box,” says Hoots.
Sustainability. With the rise of e-commerce, the volume of SKUs moving between suppliers, distribution centers, and retailers has increased significantly. The cost of using expendable packaging and the amount of waste generated makes returnable packaging a better candidate for those supply chains.
“For companies transporting that volume of product daily, it would be detrimental to the environment and to their sales/revenue toplines by buying brown box and shipping them to and from their distributors and suppliers,” says Hoots.
Because his division primarily serves the automotive segment, Hoots says sustainability is a leading issue for automotive manufacturers. The focus is to prevent brown box and expendable packaging from entering landfills.
Hoots explains the SSI SCHAEFER innovative approach to reusable packaging with its EV customers. EV manufacturers are already impacting the environment with lower greenhouse gas emissions through battery-powered cars.
SSI SCHAEFER is taking it a step further with its reusable packaging. Hoots says most of the products it sells uses recycled plastics. Thus, the company is using post-consumer materials and recycling them back into its containers.
“In partnership with our EV customers, we’re integrating chemistry into our products using ocean-bound and hemp-based plastics,” says Hoots. “Ocean-bound plastics are those materials found near coastlines that eventually find their way into our water systems. We’re using those materials by pelletizing and recycling them and putting them back into our containers.”
“With our hemp-based product, we’re working with our partners to take the leftover fibers post-harvest and convert them into plastic filler material. Essentially, we’re utilizing resources that our earth has given us to recycle for content in plastic containers. For OEM manufacturers in the EV segment, this is a vast movement,” says Hoots.
“With the launches of these new sustainable products, we’ve gained some traction as contributors to carbon footprint reduction in our environment. This is a large movement at SSI SCHAEFER that extends beyond our packaging systems division into multiple divisions of the company,” adds Hoots.
Operational efficiencies. The immediate advantage of reusable packaging systems is the ability to stack, nest, and organize them during shipping and within manufacturing and distribution facilities. As opposed to brown boxes that are torn and ripped apart during product retrieval before being thrown onto the floor for disposal.
“In an auto manufacturing environment, there’s limited space for wasteful packaging. The line-side neatness that reusable packaging systems provide during product assembly is an operational benefit,” says Hoots. “As they assemble the vehicle, our containers are line side with supplier components packed inside for easy access. Our containers can also move around within their systems much more efficiently than some of our competitors’ expendable products.”
“When not in use, customers use their storage facilities to stack, nest, and organize their containers efficiently,” he says. “It’s now common to use RFID tagging for tracking in real time where each container resides in the system—in-transit, within a storage facility, or line side for product assembly or fulfillment.”
To ensure you’re receiving the most benefit from your reusable packaging system, it’s critical to understand during the vetting process how packaging is utilized in the supply chain.
Vetting Reusable Packaging Systems
When vetting a reusable packaging system, there are a couple of important questions that can determine whether reusable is a better investment over expendable.
- What is the transit cycle of the packaging? Know the loop size of where the packaging is going and where it’s coming back from in the transit cycle. A loop from the U.S. to Mexico and back is a great loop cycle for returnable packaging, says Hoots.
“If it’s going overseas to Europe, expendable packaging may be a better option because of the cost to ship back empty containers,” he says. “However, if product ships both ways, then a reusable packaging system makes sense.”
- What are the expectations for ROI? The ROI in six to eight months versus two years could be vastly different depending on the longevity of the program and the number of loop cycles.
If the longevity of the program is one year with two loop cycles per month, the upfront investment of reusable packaging may not yield a financial benefit. Analyze how the cost of a $1.15 brown box compares in the short term and long term to a tote that costs $7.
“With most automotive programs and other customers we service, the transit cycles are in the hundreds. They can realize an ROI in the first six weeks of their product being launched,” says Hoots. “When you factor in the disposable cost of expendable packaging and repurchasing it ‘X’ amount of times over the duration of the program, a reusable packaging system often makes the most sense.”
As companies explore reusable container offerings, it’s important to find a partner that knows the market and what’s on the horizon.
Customization and Reusable Packaging Systems
Known for decades as a manufacturer and supplier, SSI SCHAEFER is rapidly growing its portfolio of customization offerings. It is value-added solutions that separate the company from its competitors.
Hoots says SSI SCHAEFER provides the total offering from the container to the customization. Highly integrated with the market, the company understands the trends moving it forward.
SSI SCHAEFER is the only returnable system manufacturer that offers a one-stop-shop, says Hoots. Many of its competitors have to use multiple facilities to offer the same solutions that SSI SCHAEFER does.
“At the end of the day, returnable packaging addresses two fronts: saving your customers’ money, while helping the planet be a better place,” says Hoots.
Links:
https://www.reusables.org/reusable-packaging/environmental-impact/
https://www.grandviewresearch.com/industry-analysis/returnable-packaging-market
https://ssitote.com/schaefer-track-and-trace-asset-management/
