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."
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.