Why is packaging or load carrier registration such a big challenge?

Many companies, all over the world, have to deal with packaging. And with packaging we mean the so-called load carriers or (returnable) containers. In fact, it is a transport item that helps to transport goods efficiently from A to B. There are many different types of packaging and each packaging item represents its own value. In addition to the many different types of packaging, various types of agreements can be made about packaging. Who is responsible for the packaging at what time and what arrangements have been made about the financing and costs of packaging? Tconsult is the packaging specialist that can help your company! We draw our knowledge from more than 15 years of experience in the packaging world!

Different types of packaging

There are many more items that are considered packaging, load carriers and containers than most people realize. We distinguish, single-use packaging (single-use pallets, boxes, etc.) versus multi-use (returnable) packaging. Bakeries, for example, mainly use bread crates (Broban crates), cooling boxes, plastic bins, pastry carts, pastry stands, and wedding cake stands as their packaging. The flower trade, on the other hand, uses completely different packaging items. The flower trade mainly uses auction carts, auction trolleys, CC carts (Dainish trolleys), DC carts with CC plates, flower buckets (566, 577, 596), flowerboxes (525, 527, etc.), pot plant containers (251, 256, 702, etc.), pallets (Euro pallets, single-use pallets), cage carts and roll-containers. These are just a few examples; each branch has its own packaging items with its specific application.

Value of packaging

Packaging items are mainly utensils to transport goods efficiently from A to B. It supports and complements the functional operation of packaging. Often the focus and attention within a company is entirely on the primary (sales-) goods and products that the company produces and/or delivers however. As consequence, they do not realize that packaging items also represent a very significant monetary value. Single-use packaging sounds easy but can also cost a lot more money than multi-use packaging, load carriers and containers. The multi-use packaging, load carriers and casks are designed to use several times, so the cost of a multi-use packaging, load carriers and containers will often be cheaper than when using single-use packaging..

A Broban Crate -also called the bread crate –  for example,  costs the bakery €7,50 and it  ‘merely’ enables the transport of the fresh baked bread from A to B. Transporting flowers is already much more complex. The flowers stand in a bucket, which can be single-use of multi-use buckets. These buckets stand on a cart with shelves / plates. A multi-use flower bucket costs €4, – per piece, the cost of a CC cart is between €35, – and €450, – and the required plates costs between €8, – and €30, – per plate. Sometimes, the value of the transport item(s) exceeds the value of the goods they are carrying! However, this high  value is not always visible for employees, transporters and customers who work with them.

Packaging agreements

There are many different types of packaging, load carriers and containers available and necessary to transport goods efficiently from A to B. The registration system behind the packaging is often complex and the packaging often represents great value. Before setting up a packaging administration, however, it is important to record the packaging agreements properly.

What do we mean by packaging agreements?

there are often (explicit or implicit) agreements concerning transport items or packaging : who is responsible for the packaging at what time and who has a balance / commitment with whom at what time. This commitment (or balance responsibility) determines who is liable in case of loss, damage, or theft. If the balance is between supplier and carrier, there is also a balance between carrier and customer. Another possibility is only a balance between supplier and customer: in other words, the carrier has no responsibility and merely transport the items, without taking responsibility for them. At the time of transfer, it is important that the recorded agreements are unambiguous, and you have to keep a close eye on their implementation. Such agreements can be made with all carriers and all customers, or individually tailored agreements for specific customers. As a selling party you can make the same agreements with all your customers or with all your carriers, but it is also possible that you make certain specific agreements per customer.

In addition  to the agreements concerning  responsibility for the packaging after transfer of the goods, there are more types of agreements. Do you put (all) packaging on the invoice to the customer as the selling party, or do you keep a packaging balance? If the packaging is on the invoice; this can mean actual sales, but this can also represent (a liability for the) deposit for the packaging. In case of selling the packaging to the customer you do not get it back unless you buy the packaging back from your customer.

If the selling party wishes more security, he can charge a deposit. This deposit is included in the total outstanding balance and influences the outstanding credit of the customer. If the customer exceeds the credit limit It may imply postponing or foregoing sales until the balance is reduced.

When there is a deposit, there is no real rush for the receiving party to return packaging, except that the cashflow will be better. The deposit, is in fact a small fee – which will be returned- that has been paid to allow the packaging to be borrowed.

Another option is to rent the packaging to your customers. With day rent there is a clear incentive to return the packaging as soon as possible to the original owner, since users pay more rent for every day/week/month that the packaging is in their possession

A quick scan or advice concerning your situation

In short, packaging, load carriers and containers are not that easy to manage properly. The process is often complex and there are many stakeholders to considers, whilst the agreements between these stakeholders may not always be unambiguous. Before setting up a packaging flow or packing administration, it is important to have a complete picture of all these aspects of packaging management. That should obviously start with the objective in mind: carefully thinking about which responsibility concerning packaging you would like and are most aligned with your strategy. Although it is often difficult, it is not impossible, to adjust agreement accordingly.

Tconsult has over 15 years of experience with these topics and with packaging and returnable transport items in general. Our consultants have worked at various companies and supported them with their packaging challenge. In addition, they have advised many companies in setting up a good packaging administration and packaging registration.

Do you also have a challenge with packaging? Or could  you use some advice? Do not hesitate and ask us!

 

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