A complex case: Rethinking today’s packaging systems

In a fast-changing world, are too many products stuck in outdated and inappropriate packaging systems?

Like a game of pass-the-parcel in reverse, many products accumulate packaging as they make their way from producer to end user. Manufacturers put each thing they make into a bag, box or bottle, then consolidate multiple packaged items into a carton or case for onward distribution. Logistics teams stack cartons onto pallets, wrap them with more packaging and send them on their way. Along the supply chain, products may be removed from one set of packaging and placed in another, as shipments are prepared for delivery to retail stores or parcels for e-commerce delivery.

This seemingly endless demand for packaging has created an $886 billion global industry. Now, according to the authors of a new DHL Trend Report, a combination of social, commercial and technical change is putting today’s packaging systems under pressure.

Every industry is wrapped up in its own packaging challenges. Automotive components are now as likely to contain sensitive silicon as sturdy steel, for example. Electric vehicle batteries are expensive, bulky, fragile and potentially dangerous. Pharmaceutical companies are figuring out ways to protect delicate drugs and devices on journeys to patients’ homes as well as to hospitals.

But perhaps the most pressing packaging challenge is underway in the consumer sector. The relentless rise of e-commerce is driving up the overall consumption of packaging, and changing the demands placed upon it. Compared with the traditional journey of a product to a brick-and-mortar retail store, an e-commerce delivery may experience 20 times the number of manual handling operations. That is 20 times more opportunity for the item to be dropped, damaged or lost along the way. Fulfillment centers are struggling to handle ever-higher volumes and velocities, while still ensuring each shipment goes into the right sort of packaging. Mistakes cost money, increasing the incidence of damage and reducing the efficiency of transport utilization. On average, 24% of the volume of an e-commerce parcel today is empty space.

Packaging creates a significant environmental burden, too. Plastic packaging accounts for around a quarter of the estimated 8.3 billion metric tons of the material produced since plastics were first commercialized in the 1950s. In 2016, EU citizens generated 170 kilograms of plastic packaging waste per person. Only 14% of the plastic packaging used globally is currently recycled, and when plastic waste is sent to landfill, it takes up to 450 years to decompose. Significant volumes of packaging are not captured in properly managed waste streams and instead enter the environment.

Recognition of the shortcomings of today’s packaging approaches has unleashed a wave of innovation. The authors of the DHL report have identified dozens of novel materials, products, processes and technologies – all aiming to help companies to improve the performance, usability or environmental footprint of their packaging systems.

Digitally optimized

Packaging innovation begins a long way outside the box. Warehouses and fulfillment centers are using an array of digital technologies to improve every aspect of their packaging processes – from advanced computer vision systems that precisely measure products, to smart algorithms that help staff pick the right container and pack items in the right sequence for optimal protection and space utilization. Packing activities are becoming increasingly automated, too, with the development of equipment that can manufacture right-sized packaging on demand, and the introduction of robots and cobots into packaging processes.

User-friendly solutions

Designers are rethinking packaging in the face of changing customer needs. A product on the shelf of a retail store needs to entice the customer to buy. In the world of e-commerce, that decision has already been made by the time the customer first sees the box. Packaging remains an important point of contact between user and brand, however, and product companies are now creating e-commerce-specific packaging designed to reinforce their brand values and offer an engaging and satisfying unboxing experience.

The quest for improved sustainability is driving the development of new materials and new logistics models. Substitutes for oil-based plastic bags and films include compostable materials made from a variety of agricultural residues. And the growing significance of e-commerce in the fresh food sector is spurring the production of low-impact thermal insulation solutions for temperature-sensitive shipments.

Nevertheless, the best way to reduce the impact of packaging waste is to eliminate it altogether. That’s the promise of new closed-loop packaging approaches, which have products shipped to e-commerce customers in durable, reusable bags and boxes that they can send back to the supplier for reuse.

The internet of parcels

The continually falling cost of electronic devices is helping packaging to become more self-aware. Embedded sensors allow packages to be tracked through the supply chain, and smart labels can adapt themselves to display warnings if a product has been exposed to shocks, moisture or extreme temperatures. Today, such technologies are still too costly for all but the most high-value or safety-critical shipments. But innovations such as printable electronic circuits and battery-free tags that scavenge energy from Wi-Fi and radio signals promise further cost reduction in the coming years. That opens up a world of possibilities – from food or drug packaging that can dynamically adapt its use-by dates to reflect conditions experienced during delivery, to parcels that can readdress themselves on the fly at the recipient’s request.

Easy-to-use, recyclable and robust packaging is critical to the overall customer experience, says Matthias Heutger, Global Head of Innovation & Commercial Development at DHL. “We believe that the adoption of new packaging optimization tools, materials, and handling technologies will significantly boost efficiency, sustainability, and productivity throughout supply chains from end-to-end. That, in turn, will allow the logistics industry to meet emissions targets and rising quality standards customers have come to expect.” —  Jonathan Ward

Published: January 2020

Image: Adobe Stock