The importance of packaging optimization for importers

I recently got in contact with Kevin Howard, the principal consultant at Packnomics. He has been working on packaging issues since 1984, and has been involved with China since 1987, when he taught Distribution Packaging and Testing at the first school of packaging in China (in Shaanxi province).

I asked Kevin a few questions, the first two of which are reproduced below. He has an interesting angle on the costs associated with packaging. I urge importers to read his responses, as they might well save many thousands of dollars.

Question: Most Chinese factories look for the lowest cost and the easiest solution when it comes to packaging. The reason is that the importer bears all the consequences of a poor protection of their goods or an unoptimized shipment volume. What should buyers have in mind when they write their packaging specs?

Answer: The lowest cost packaging material can be very expensive in terms of damages, presenting a poor quality image to the consumer, and perhaps resulting in higher-than-necessary logistics costs (transportation, handling, storage, materials, damages).

Packaging specs for corrugated boxes are often based on material specs, such as liner weights, flute heights, and edge crush values, but the materials found readily in the US are not so easily found in other parts of the world. Actually, even within the US, no two box manufacturers will end up with the same strength box due to differences in materials and manufacturing processes.

Corrugated boxes shipped from China have to be strong enough to withstand high humidity, compression loading, bumpy vibration, and drops. Setting performance standards for boxes, such as compression strength, is far easier to measure than are material specs. The box manufacturer can use their specific paper stocks and processes to attain the strength required and not worry about whether or not they can get a material that is impossible to find.

Determining performance specs requires companies to know more about the distribution environment, store requirements, and customer’s ability to easily open the package.

Question: What are the most common mistakes and sources of problems, when it comes to packaging of imported products?

Answer: Damage problems often get the most attention, but the most costly problem is excessive packaging.

Excess protection may come about as a result of excessive laboratory test standards, such as too many drops from too high of a height compared to drops actually found in the supply chain. Many packages from China are shipped on poor quality pallets made of non-solid wood, all in an effort to minimize the pallet cost. These pallets often break and are rarely good enough to be used after they complete their task.

On the other end of the spectrum are the companies that ship non-unitized boxes in ocean containers. In this scenario, inexpensive Chinese labor is used to hand stack one box at a time into containers. The importer thinks this is great since the load is absolutely maximized with boxes reaching from the floor to the ceiling, wall to wall, front to back. If labor was as cheap in the US and Europe as it is in Asia, then perhaps this system would be cost effective, but labor costs of about $15 per hour coupled with 6 or more hours to unload a 40’ container means this system is expensive.

Loose boxes also results in dropped boxes, along with the need to figure out which products are in the shipment and then palletize the like ones. If a mistake occurs, then products can get lost.

If boxes were unitized onto slip sheets instead of poor quality pallets or loose-filled, containers can be loaded and unloaded in about 30 minutes. This also avoids free fall drops, limits scuffing issues against the walls of the container, and assures products are already categorized together.

When single boxes need to be unloaded, the long time required results in demurrage charges. I was at the international distribution center in Los Angeles for one of the largest companies in the US. Due to loose boxes, they had to store filled ocean containers off site until dock doors became available. The charges for holding these containers in Los Angeles added up to significant money. They were thinking about increasing the warehouse and number of dock doors, also very expensive, when they really only needed to enforce unitization of loads coming in from Asia.

Kevin’s responses are very detailed, so they would make for a very long article. I will post 2 other articles in the coming days.

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Comments

  1. says

    Good read. Can one identify types of products that utilizing good quality pallets from China is currently a best practice, or is floor loaded or slipsheet always the best approach?

  2. says

    I think that floor loading of products is rarely the best solution since it invites excessive individual manual handling, leads to mis-orientation of boxes (which leads to compression failures), allows for more opportunities of significant drops, exposes the box panels to scuffing on the interior walls of the ocean container, and allows direct corrugated contact to the floor, which often gets wet from either condensation or leaks. On top of all of these issues, the cost factor at the receiving end has rarely been accounted for.

    Of course, the good thing about floor loading is that it can absolutely maximize the number of products per ocean container. It is my contention that this densification can be nearly equaled with more forethought on packaging and product sizing in conjunction with slip sheets. Unitization is the key to faster operations and far less damages.

    Pallets are good for unitization, but their standard footprint sizing (48″ x 40″ or 1200 mm x 1000 mm or perhaps something else) rarely maximizes the available space in ocean containers. Slip sheets on the other hand can be made in a range of sizes than leaves very little empty floor space. The key to using slip sheets is training of operators who need to handle them. If a corporation does not control the end points of the supply chain where the loads will be placed into and taken out of the ocean containers, then pallets will be needed. Larger companies usually can replace pallets for all international shipments with slip sheets by simply buying a few pieces of equipment and training at least the few people who load and unload containers. When the slip sheeted loads arrive in the US or Europe, the trained drivers can simply place the loads onto regionally appropriate pallets. Many American companies fail to realize that if they ship their products from China on a 48″ x 40″ pallet to Europe, that pallet is often thrown away upon reciept and replaced with either a Euro pallet (1200 x 800) or industrial pallet (1200 x 1000). In other words, the pallet cost from China is a total loss, no matter how little it may have cost. If loads had been placed onto slip sheets of the appropriate size, these products could then simply be placed onto the regional pallet and stretch wrapped at the bottom.

    So, good places for continued use of wood pallets include: companies that don’t control the loading and unloading points, so can’t guarantee correct fork lift trucks or trained workers, along with products that are far beyond the 48″ x 40″ footprint size. Larger products might find it impossible to be handled with slip sheet push/pull equipment. At some point though, if the product is particularly heavy and long, wood pallets can lead to damages since they flex at the end points of the fork lift tines. In these cases, I’ve recommended industrial clients to replace wood with steel.

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