“Reuse” forms one–third of the sustainability triad, along with “reduce” and “recycle.” Perhaps the most seamless form of reuse is closed-loop secondary packaging.
Reusable pallets, crates, trays and other forms of shipping materials are used extensively by food and beverage manufacturers, at both ends of the supply chain: receiving packaging materials and shipping finished goods. Some such uses have been around for a long time, like milk crates and bakery trays. In others, the potential is just beginning to be unlocked.
In the right applications, reusable secondary packaging has always had advantages of dependability, sanitation and long-term cost savings. Now that sustainability is a big packaging imperative, the waste-reduction aspects of reusable shipping have strongly emerged.
Two lenses“There is an economic lens that is put on, and an environmental lens,” says Bob Klimko, director of food and beverage marketing and sustainability at Orbis Corp. “They go hand in glove.” Klimko identified dairy, beverages, bakery and produce as the established consumer-goods markets for Orbis totes and other products, with case-ready meat as an up-and-coming segment.
Reusable secondary packaging is almost always used in a closed-loop system, where it circulates throughout a supply chain (if not the same two points over and over). Economic considerations include the number of uses in the container’s lifetime, the packaging weight, annual loss and damage rates, transportation costs and end-of-life disposal costs, Klimko says. One basic consideration is whether to rent the containers or own them, and if the latter, to determine which supply-chain partner will own them.
“If they’re going to own, do they own it as a company, or do they talk to their supplier and say, ‘You’re going to own these assets. Charge us and amortize it through the cost of your goods sold,’” Klimko says. Ownership is an important consideration because one of the basic questions in a closed-loop system is who will take responsibility for collecting, cleaning and repairing the crates, pallets or whatever.
Two-point loopsIn some reusable-packaging systems, the company supplying the packaging retains ownership and assumes responsibility for it. This works best in truly closed-loop systems, where there are only two participants, such as between packaging suppliers and their end-user customers.
Corbi Plastics is a supplier of plastic dunnage, including pallets, top frames and slipsheets. All of its clients are suppliers of bottles and cans and their customers, most of them in the beverage industry. Corbi owns this secondary packaging, which protects the empty containers on their way to the beverage plant. Corbi routes the dunnage through one of 13 service centers nationwide, where it is inspected, cleaned, and repaired or replaced as necessary.
The advantage of this arrangement for end users is that they don’t have to think about the protection for their empty containers, according to Corbi president Jack Graham.
“They don’t care anything about the [shipping] packaging. It’s a necessary evil for them,” Graham says. “As long as the can or bottle comes to them in a manner that is clean and sturdily packed, so that they can unload it without it falling over, that’s what they want.”
For container suppliers, having Corbi own the dunnage means they no longer have to risk alienating their customers by charging them for damaged pallets or slipsheets. “The [suppliers] like that because now they’re not wearing the black hat,” Graham says.
Durable palletsOne of the most common forms of secondary packaging is reusable pallets.
Reusable wooden pallets are constructed with more durable wood, and painted and fastened more durably, than ordinary wooden pallets. The leading supplier, CHEP, maintains a global network of more than 440 service centers in 44 countries. Major customers include Dole Fresh Vegetables, which recently announced a long-term renewal of a contact it started in 2006. By using CHEP pallets instead of limited-use ones, Dole will reduce solid waste generation by more than 18 million pounds this year, decrease greenhouse gas emissions by 58% and save enough energy to power about 1,500 homes with electricity, according to a third-party analysis commissioned by CHEP.
Plastic pallets are an alternative to reusable wooden ones. They’re more expensive than wooden ones, but more durable. This has certain operational advantages, says Bob Moore, president of plastic pallet provider iGPS (and former CEO of CHEP).
“There’s big cost savings for manufacturers that have highly automated [palletizing] lines, because of the lack of intervention created with a plastic pallet,” Moore says. “Wood sheds, and an intervention is [needed] when they have to shut the power down to the line...and then take a crowbar and pry a wooden shard out of a roller or piece of equipment. You’ll have some number of workers standing around doing nothing and the line producing no product.”
Plastic pallets are what Moore calls “binary,” or go/no go, and it’s easy to tell if they’re not in fit condition for another trip. This means iGPS can sometimes simplify the pallet supply chain. About half of its pallets are inspected by the goods manufacturers that use them; any pallets that need repair get shipped to one of iGPS’s 50 U.S. depots by the manufacturer, whom iGPS reimburses for the shipping.
The issue of plastic vs. wooden pallets took a controversial turn last year, with charges and countercharges over product and fire safety. (See “Pallet wars: wood vs. plastic” below.)
Providers of secondary packaging-when they’re being honest, anyway-freely admit that it’s not for every application.
“If it doesn’t make sense for a given supply chain, we’re going to tell them,” says Orbis’ Klimko. “In many supply chains, reuse and single-use co-exist.” But when it’s a good fit, it offers a chance to save both money and, to a small extent, the planet.
SIDEBAR: Pallet wars: wood vs. plasticPallets don’t ordinarily get a lot of attention, but lately they’ve been a platform for controversy.
Manufacturers of both wooden and plastic pallets have been sniping at each other for more than a year about various safety issues. It started when the National Association of State Fire Marshals (NASFM) expressed concerns that the chunks of wood that separate the upper and lower decks of a pallet, known as blocks, were made with wood fragments and sawdust held together with adhesives that often contain urea-formaldehyde, which is flammable. The NASFM looked into changing the fire risk rating for wooden pallets, which would potentially impose crippling costs for sprinkler systems and/or insurance premium increases.
The National Wooden Pallet and Container Association (NWPCA), an industry group of pallet recyclers, fired back by pointing to the fire risk of plastic pallets. The NASFM is still studying the issue.
That wasn’t the end of it. The wooden-pallet people started playing up the dangers of deca-bromine, an additive used as a fire retardant in plastic pallets, saying it could enter a plant or warehouse atmosphere if a pallet were scraped or otherwise abraded.
Plastic pallet manufacturers, especially industry leader iGPS, countered by alleging several risks of wooden pallets, including bacterial infestation and the use of harmful chemicals as fumigants. Their case was bolstered by an incident in December, when 60 million bottles of Tylenol and other over-the-counter medications were recalled after consumers claimed of being sickened by moldy-smelling pills. The source of the contamination was traced to a chemical called 2,4,6-tribromoanisole used to treat pallets that shipped product from a Johnson & Johnson facility in Puerto Rico. That chemical is not allowed in the U.S., but is widely used in South America.
Some think the controversy is at least as much about market share as it is about safety.
Trevor Suslow, a research specialist in food safety at the University of California-Davis, told ABC News the wood vs. plastic controversy doesn’t surprise him: “It’s a big market. No wonder they fight about it.”