Transport Packaging: Reusable Containers Still Make Cents

April 1, 2006
AIAG estimates that the automotive industry spends more than $750 million annually to replace reusable containers.

An interesting story from BusinessWire crossed my desk in March. In a speech before the Transpacific Maritime Conference, Chang Kuo-Cheng, vice group chairman of Evergreen Marine Corp. (Taiwan), urged the international transportation industry to come together to develop new ways to protect the environment for future generations while it maintains the efficiency of its global network.

Chang noted that while in the past this issue of protecting the environment might have been easily dismissed as commercially insignificant, it is no longer the case. "We must begin to develop the foundation for a sustainable container transportation industry."

Chang's message promoting reusable containers is not new. It's been around at least since 36 years ago this month when 20 million people celebrated the first Earth Day. Far out, man. Do more with what you've already paid for is an easy to understand principle. Why has it been slow to take hold?

Granted, Chang is taking the really big-picture view when he talks about containers. He's talking about shipbuilding design, and sea containers the size of rail cars.

If we take a more micro view of the container business, down to a level where a person can carry a couple cartons or totes, the principle of reusable containers still makes sense.

The automotive industry has been the leader in the use of reusable containers. Automotive began its quest nearly 20 years ago in an attempt to reduce costs related to trash disposal, improve plant housekeeping and standardize shipments of parts into assembly plants.

Eventually, through the efforts of organizations such as the Automotive Industry Action Group (AIAG, Southfield, Mich.) common standards for containers emerged. The organization's Returnable Container Performance Test Guidelines, released in 2002, help manufacturers of containers better understand the needs of the automotive industry. It ultimately led to products such as the reusable container now standard for small parts and fasteners.

A couple years ago, at the time of the release of these guidelines, Randal Stout of General Motors noted that container selection is critical to the success of any project, since poor transport packaging decisions can result in unnecessary rework or replacement costs and delays.

Looking beyond the four walls of a distribution center or manufacturing plant, Pennsylvania Farmer magazine did a random survey of its readers and learned that 98% of them favor returnable container legislation. Containers of all types discarded on their property is the major source of pollution and litter. Livestock deaths, crop losses, feed contamination, equipment damage and other factors bring the average litter-related loss in Pennsylvania to an estimated $938 per farm.

An argument against reusable containers has always been that you can't manage what you can't count. Consequently, tracking of these assets is another challenge the AIAG has taken on. It has been holding exploration programs with container users and technology experts to determine how radio frequency identification technology can be implemented at the container level of material handling and automobile assembly.

A guideline is in the works. AIAG estimates that the automotive industry spends more than $750 million annually to replace reusable containers. The revised RC-6: Returnable Containers Tracking Guideline will incorporate the use of automatic identification technologies to increase visibility of reusable containers throughout the supply chain.

Whether a container is big or small, the key to developing any kind of sustainable/returnable/reusable container program is education. Technology is not the problem. The challenge is to raise the awareness of people who put things into containers for whatever reason; that benefits accrue each time the container is used. Then there is the need to educate the users of containers so that sustainable, reusable and returnable become synonymous.

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