Pack­ag­ing for Lo­gis­tics: High cost ben­e­fits but low pri­or­ity?

Pack­ag­ing en­sures a has­sle-free trans­porta­tion of goods. De­spite this, pack­ag­ing is rarely recog­nised as an im­por­tant part of lo­gis­tics in­dus­try. CARGOTALK asks in­dus­try ex­perts what makes ship­pers and for­warders put pack­ag­ing on low pri­or­ity and how good

Cargo Talk - - Front Page - KALPANA LOHUMI

Shailen­der Anand

Part­ner & Man­ag­ing Di­rec­tor – In­dia, Pronk Mul­ti­ser­vices

Un­doubt­edly, pack­ag­ing is an in­te­gral part of lo­gis­tics to en­sure dam­age-free trans­porta­tion of goods. But the prob­lem lies in the mind­set of peo­ple. In­dian lo­gis­tics in­dus­try in­cludes mainly freight for­warders, who never push their cus­tomers to un­der­stand the im­por­tance of pack­ag­ing and the qual­ity of pack­ing used for ship­ment. It is also a well known fact that gen­er­ally ship­pers in In­dia do not give due im­por­tance to pack­ag­ing. They find it im­por­tant only when there is a pos­si­bil­ity of mois­ture and rain.

The prob­lem is also that nei­ther ship­pers nor for­warders know about the avail­able so­lu­tions. They need to un­der­stand that now there are pro­fes­sional com­pa­nies for pack­ag­ing. It takes en­gi­neer­ing ex­cel­lence to de­sign a so­lu­tion for pack­ag­ing & ac­cord­ingly de­sign a box to se­cure your cargo in it. With the proper pack­ag­ing a ship­per can save ap­prox­i­mately 15 per cent of the cost in a year. Pack­ag­ing in­dus­try is still in its nascent stage be­cause nei­ther the lo­gis­tics in­dus­try is mak­ing an at­tempt to ed­u­cate ship­pers nor are they in­ter­ested in find­ing a so­lu­tion for ship­per. The lo­gis­tics in­dus­try should push the ship­pers to use right pack­ag­ing to avoid claims and busi­ness losses.

Rad­hara­manan Pan­icker Man­ag­ing Part­ner, R Lo­gis­tics So­lu­tions and Man­ag­ing Di­rec­tor, Dan­ger­ous Goods Man­age­ment In­dia

Un­for­tu­nately, from a fi­nan­cial per­spec­tive, pack­ag­ing is taken as a cost which adds no value. Fur­ther there is no reg­u­la­tory re­quire­ment to use a par­tic­u­lar type of pack­ag­ing ex­cept for dan­ger­ous goods. Added to the above is the fact that peo­ple think that lower the value of the goods be­ing shipped, lower should be the cost of the pack­ag­ing. What they for­get in the bar­gain is that the dam­age poor pack­ag­ing does to the prod­uct and to the brand eq­uity.

When it comes to pack­ag­ing of dan­ger­ous goods ma­te­rial, the reg­u­la­tory re­quire­ment is strin­gent, yet peo­ple try to avoid us­ing the right and ap­pro­pri­ate pack­ag­ing, on ac­count of cost dif­fer­en­tial. In­abil­ity to re-use the pack­ag­ing is another fac­tor which de­ters peo­ple from us­ing qual­ity and durable pack­ag­ing. Trans­port pack­ages are thrown off at des­ti­na­tion so in that sense it be­comes a waste­ful cost. If there is a way for the sup­ply chain to re­turn the trans­port pack­ag­ing back to ori­gin at neg­li­gi­ble cost, prob­a­bly com­pa­nies will spend money on good pack­ag­ing.

Sha­bana Khan

Vice Pres­i­dent - Air­freight In­dia, DHL Global For­ward­ing

Pack­ag­ing is a fun­da­men­tal com­po­nent of sup­ply chain, pro­vid­ing ben­e­fits such as prod­uct pro­tec­tion, con­sumer in­for­ma­tion, safe and con­ve­nient han­dling and prod­uct mar­ket­ing.

The pack­ag­ing in­dus­try in In­dia is evolv­ing es­pe­cially in the lo­gis­tics space. Pro­fes­sion­als in the in­dus­try are now cre­at­ing im­proved aware­ness to meet global com­pli­ances giv­ing due con­sid­er­a­tions in their of­fer­ings to sus­tain­abil­ity, en­vi­ron­men­tal re­spon­si­bil­ity and ap­pli­ca­ble en­vi­ron­men­tal and re­cy­cling reg­u­la­tions.

The im­por­tance of ap­pro­pri­ate pack­ag­ing can­not be over em­pha­sized to avert un­de­sir­able in­ci­dents while the cargo is on the ground, in transit or dur­ing han­dling and stor­age by the end re­cip­i­ent. Poor pack­ag­ing can re­sult in a de­lay in busi­ness trans­ac­tions with an in­fe­rior prod­uct reach­ing the cus­tomer, fi­nan­cial claims and pos­si­ble con­se­quen­tial losses. So, the ram­i­fi­ca­tions can be far-reach­ing.

On the other hand, good pack­ag­ing re­duces im­pacts through­out the sup­ply chain. As a lo­gis­tics ser­vice provider, through var­i­ous trade as­so­ci­a­tions and reg­u­la­tory bod­ies, we can make in­creased ef­forts to en­lighten and ed­u­cate our ship­pers who are re­spon­si­ble for good pack­ag­ing prac­tices.

Amit Ba­jaj

Di­rec­tor, Mi­tuj Mar­ket­ing

Pack­ag­ing is used to se­cure goods in proper con­di­tion un­til it reaches the des­ti­na­tion. How­ever, the lo­gis­tics in­dus­try needs sen­si­ti­sa­tion on this sub­ject. The whole value chain has to work on this.

A ma­jor con­trib­u­tor to the dam­ages is the mul­ti­ple man­ual han­dling of the cargo. The mech­a­ni­sa­tion in han­dling the cargo is next to neg­li­gi­ble in the to­tal chain. We need to mech­a­nise more to min­imise the dam­ages. The lo­gis­tics in­dus­try needs to make cap­i­tal in­vest­ments. The mo­ment we are able to pal­letise our move­ments and stor­age, the dam­ages and pil­fer­ages will come down sub­stan­tially.

Ke­shav R Tanna

Di­rec­tor, Links For­warders

It is re­ally not un­der­stood why proper pack­ag­ing has taken a back seat amongst ex­porters and has not re­ceived the im­por­tance which it de­serves. The ques­tion is, “Why would I want to send my ex­pen­sive ship­ment in im­proper pack­ag­ing?”

Sav­ing on the same only am­pli­fies short sight­ed­ness, as any dam­age to the fi­nal prod­uct could only re­sult in cum­ber­some claims thereof es­pe­cially for In­dian han­dling con­di­tions. Ship­pers must un­der­stand the im­por­tance of proper pack­ag­ing. Our air­ports and sea­ports have al­ways re­quired ship­ments to be packed more stur­dily to cope with the ar­du­ous han­dling con­di­tions due to lack of in­fra­struc­ture.

Air­lines in In­dia de­mand for shrink wrapped pack­ag­ing in the mon­soon months, even though it is en­vi­ron­men­tally un­friendly due to im­proper han­dling con­di­tions. How­ever, it is heart­en­ing to note that cer­tain ship­pers have re­alised this due to the na­ture of their prod­ucts (like high value phar­ma­ceu­ti­cals) and have started pay­ing more at­ten­tion to this im­por­tant as­pect in lo­gis­tics ac­tiv­ity. Some of them have started us­ing data log­gers to con­stantly mon­i­tor their tem­per­a­ture sen­si­tive cargo.

Not only the qual­ity, but also the size of the pack­ag­ing plays a cru­cial role in lo­gis­tics as this is di­rectly con­nected to the freight that the ship­per would pay for his cargo. To­day cer­tain soft­ware com­pa­nies have also come out with soft­ware pro­grammes to cal­cu­late the vol­ume of the cargo, thus giv­ing the ideal pack­age size which the ship­per can use in or­der to op­ti­mise con­tainer space.

Ra­jesh Nee­lakanta

Ex­ec­u­tive Di­rec­tor & CEO, BVC Lo­gis­tics

The pack­ag­ing in­dus­try in In­dia is highly frag­mented. This is a strong con­trib­u­tor to the medi­ocre at­ten­tion ac­corded to pack­ag­ing by a large sec­tion of In­dian in­dus­try. The cus­tomer re­ac­tion to im­proper pack­ag­ing too is muted, largely. Also, there is no co­or­di­nated work­ing be­tween the pack­ag­ing and the lo­gis­tics providers. It is im­per­a­tive to bring in a co­he­sive part­ner­ship be­tween these two crit­i­cal links of the sup­ply chain. This can help mit­i­gate the lo­gis­tics-re­lated transit/stor­age dam­ages to pro­duce.

We, at BVC, have in-house spe­cial­ists who have been as­sist­ing our cus­tomers with ad­vice on ap­pro­pri­ate pack­ag­ing, es­pe­cially for the high value branded prod­ucts. This has saved sub­stan­tial transit dam­age in­stances for these cus­tomers. We would be very keen to col­lab­o­rate with the pack­ag­ing in­dus­try to share our op­er­at­ing chal­lenges be­cause of poor pack­ag­ing. This col­lab­o­ra­tion would help mit­i­gate dam­ages to the cargo that we han­dle and thus help save sub­stan­tial costs.

I would like to urge the man­u­fac­tur­ing and trad­ing sec­tors to fo­cus on em­ploy­ing the most ap­pro­pri­ate pack­ag­ing so­lu­tions to be able to present to your cus­tomers the most sat­is­fy­ing pur­chase ex­pe­ri­ence. Re­mem­ber, good pack­ag­ing prac­tice is well re­warded, in In­dia, by the mul­ti­ple re­use of the pack­ag­ing thus of­fer­ing pub­lic­ity.

Arindam Chakrabarti Head, In­dus­trial & Site Lo­gis­tics Ser­vices Drive In­dia En­ter­prises So­lu­tions – A Tata En­ter­prise

Prod­uct pack­ag­ing plays a sig­nif­i­cant role in all sec­tors and can­not be ig­nored. How­ever, man­u­fac­tur­ing com­pa­nies do not con­sider it as part of sup­ply chain and lo­gis­tics. It largely re­mains with ei­ther mar­ket­ing, prod­uct de­vel­op­ment or en­gi­neer­ing, and hence it is taken up on as-is where-is ba­sis. Any ap­proach for pack­ag­ing to im­prove lo­gis­tics ef­fi­ciency re­quires cross-func­tional col­lab­o­ra­tion; and this in­te­gra­tion of var­i­ous de­part­ments in the de­ci­sion mak­ing of prod­uct pack­ag­ing is a big chal­lenge. Out­sourc­ing the busi­ness to 3PL it­self is frag­mented be­cause cus­tomers still seek lo­cal op­ti­mi­sa­tion.

Lo­gis­tics com­pa­nies are yet to see them­selves as so­lu­tions providers. They re­main con­fined broadly to ei­ther ware­hous­ing, or as trans­porta­tion play­ers or in niche func­tion­al­i­ties.

Another is­sue in the in­dus­try is lack of fo­cus on re­turn­able so­lu­tions due to lack of mar­ket aware­ness re­gard­ing re­duc­ing car­bon foot­print per prod­uct. But re­puted brands and multi­na­tion­als have started fo­cus­ing on pack­ag­ing to op­ti­mise the over­all cost. And be­ing a lead­ing player of in­te­grated lo­gis­tics so­lu­tions, DIESL of­fers cus­tomised pack­ag­ing so­lu­tions to var­i­ous clients.

Aakanksha Bhargava

CEO & Pres­i­dent, PM Re­lo­ca­tions

In­dia has seen a tremen­dous growth in the past five years. Though there has been a sig­nif­i­cant im­pact on the ef­fi­ciency and ef­fec­tive­ness by de­creas­ing the num­ber of claims, still pack­ag­ing in In­dia is not con­sid­ered a cru­cial el­e­ment due to var­i­ous rea­sons.

Pack­ag­ing means de­liv­er­ing cargo safely and se­curely to its des­ti­na­tion. Con­sid­er­ing In­dian roads, not only packed cargo will ap­pro­pri­ately help you on sav­ing time and money but will help you boost the com­pany's cred­i­bil­ity with the clients. Hence, it is im­por­tant that we ef­fi­ciently train and equip our pack­ers with the right tools and knowl­edge to main­tain this cred­i­bil­ity.

Apart from this, us­ing foam, bub­ble wrap, cor­ru­gated sheets and stretch film will en­sure safe han­dling and de­liv­ery. One can even get spe­cially made con­tain­ers, crates and cases to pack their valu­able goods. Such mea­sures will help the ship­ments to reach the cus­tomers in the good con­di­tion.

Jatin­der Pan­jwani Head Sup­ply Chain – In­dia Oper­a­tions Mi­cro­max

There are so many lay­ers in the process of ma­te­rial get­ting de­liv­ered from one part of the world to another. There are ship­pers, con­signees, ports, lo­cal trans­porters and freight man­age­ment com­pa­nies. Ev­ery­body has to play a vi­tal role and right pro­por­tion of con­tri­bu­tion to en­sure ma­te­rial reaches safely. Some­times, change in modes of trans­porta­tion de­stroys prod­uct. So, the ship­per has to en­gross the right pro­por­tion of pack­ing v/s mode of trans­porta­tion to en­able the com­plete cy­cle to de­liver bet­ter.

Port of lad­ing or dis­charge should be ca­pa­ble of han­dling all sorts of ma­te­rial at any given time. The prime role of trans­porter or the car­rier is to un­der­stand the need well be­fore the ma­te­rial ar­rives to get the right mix of ma­te­rial han­dling equip­ment to get them de­liver bet­ter, faster and with­out get­ting them dam­aged.

So, win-win sit­u­a­tion would be when each leg of trans­porta­tion like ship­per, con­signee, trans­porter or port author­i­ties feed their re­spon­si­bil­i­ties cor­rectly to col­lab­o­rate and de­liver dam­age free ma­te­rial. For ship­pers and con­signees the last re­sort to han­dle the ex­cep­tions is to get them cover. How­ever, if we can man­age all the legs of oper­a­tions in best of their spir­its, we can con­fine the ma­jor col­lat­eral dam­ages.

Arun Sharma GM - Lo­gis­tics and Sup­ply Chain Ori­ent Elec­tric

The pack­ag­ing de­sign still has to travel a lot to­wards in­ter­nal col­lab­o­ra­tion in­stead of sim­ply keep­ing aes­thet­i­cal as­pects into fo­cus. Re-de­sign­ing pack­ag­ing, keep­ing ware­hous­ing and lo­gis­tics fac­tors in con­sid­er­a­tion can re­duce af­ter-sa­lesser­vice bills and can im­prove ser­vice­abil­ity and cus­tomer sat­is­fac­tion in a large num­ber.

Load abil­ity is also one of the fac­tors, which is not of­ten con­sid­ered while de­sign­ing the pack­ag­ing. By means of re­design­ing the pack­ag­ing ve­hi­cle util­i­sa­tion can be im­proved and ware­house and stor­age losses can be re­duced as well. In In­dia, a lot of ma­te­rial is trans­ported from dis­trib­u­tor’s godowns to smaller towns in mixed loads, which is called Par­choon Loads, along with gro­cery, hard­ware and house­hold ar­ti­cles. When the smaller lot of dif­fer­ent ma­te­ri­als areto be trans­ported as a milk-run lo­gis­tics the prod­uct pack­ag­ing need to be de­signed to travel along with such loads.

In a nut­shell, the pack­ag­ing de­signs must have lo­gis­ti­cal and ware­hous­ing as­pect in or­der to achieve op­er­a­tional ef­fi­ciency.

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