Managing the cost of packaging in uncertain financial times

To say that the world turned upside down in 2020 may just be an understatement. From the coronavirus pandemic to bizarre government leadership, there wasn’t a single corner of the globe that remained untouched – economically or socially. Likewise, the corrugated packaging industry experienced its own unexpected twists and turns.

Stay at home directives prompted an unprecedented demand for packaging as consumers turned to home delivery for their food and other goods: from grocery services like Sobeys, Longos and Loblaws to products distributed by Amazon and Best Buy. Many businesses with employees working from home, relied on couriers to keep their operations running, carriers like UPS, Purolator and Federal Express. This global dynamic added up to a huge growth in demand for packaging in 2020.

Not surprisingly, increased global demand also resulted in driving prices upward – a fact of economics, prompting manufacturers and shippers to try to find ways to curtail the cost of packaging that was already experiencing inflationary pressures. Filtering into the cost of packaging were sharp worldwide increases to the price of pulp and paper, as much as 25%; increased cost of transportation and freight; rising tariffs; shifting exchange rates; and the need for paper mills to adjust their operations to ensure employee safety and social distancing were in place during the pandemic.

So that’s the “why” of cost increases, but now let’s look at the more important question: The “how”.

How can you stay ahead of your packaging costs in these challenging economic times? There are a number of ways you can save money on packaging. One of our clients saved $70,000 a year by switching from corrugated pallet sheets to a less expensive but equally efficient alternative: chipboard pallet sheets. Based on RDR’s recommendations, many customers have saved money by switching to thinner and equally effective chipboard pallet, tier and divider sheets.

To help make your packaging work harder for you, here are a few tips to consider:

• The cheapest packaging may not necessarily be your best option. Low-cost packaging can be an adequate short-term solution, but may prove problematic when you find yourself faced with damaged shipments or lost items down the road.
• Take advantage of added value services from your supplier. For example, RDR Packaging offers integrated packaging and products including robust marketing and sales support with our customized, eye-popping corrugated floor displays and custom die cut boxes for beautiful promotional packages.
• With the price of paper going up, consider the type and style of packaging you use. Our consultants can advise if it is reasonable to change to a more cost-effective board grade and offer different, custom-sized boxes that use less material. Consider taking advantage of our full range of packaging solutions in a wide array of storage and shipping boxes, materials and coatings.
• Have you optimized your packing or are you using excessive amounts in your secondary packaging? An example of this could be as simple as switching from standard taped boxes to cartons with self-locking bases. These assemble more quickly and save on the cost of taping.
• You might consider chipboard which is more affordable than corrugated packaging and takes up less room in a warehouse. However, in some instances, corrugated works well and is ideal if you are shipping a bulkier product that requires strength and durability.
• “Right size” your cartons. A well-tailored box for your product, would reduce the amount of fill required to close gaps inside, and save on storage space and shipping.
• Alter the size of your shipping case. By doing so and paying attention to how boxes are stacked on the pallet, you may be able to add an extra layer of product on the pallet; it allows for more product in the shipment, and can reduce the number of shipments significantly.
• To reduce costs of transportation and freight consider bags; they are easier to ship. We offer woven polypropylene bulk bags/tote bags for all applications.
• Ordering larger volumes also reduces costs, but large inventory can take up expensive warehouse space. Luckily RDR offers a Custom Inventory Program for our CFIA or AIB certified tote bags, which we warehouse and ship to you when you need them.
• Think about freight when choosing your packaging. Lighter weighted packaging with less volume that’s perfectly sized for your product, can reduce your transportation costs and allow you to send more items.
• With so many opportunities for cost savings, make sure you don’t go too far. Remember that ensuring your product arrives undamaged is the primary objective behind the packaging. Shaving an inch off here or there, should not result in a higher rate of product damage.
• And the final tip: Take advantage of the experts at RDR Packaging who are always available with advice you can trust. Get in touch with us today for a solution that won’t break the bank or your product.

RDR Packaging consultants can help ensure your packaging is as lean and efficient as possible, allowing you keep control of costs. Give us a call at 905-607-0053 and we’d be happy to work with you on the best solution.