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
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.
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.
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.
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.
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.