Getting a Handle on Reusable Packaging Loss and Theft

Changing Supply Chains and Lack of Management Focus Lead to Challenges

 The loss of reusable transport packaging by industry, including reusable plastic containers such as milk crates and bread trays, shipping pallets and aluminum beer kegs, is a serious financial problem. It is not a new concern. I can remember being at a trade show around 15 years ago and one asset tracking software company hung a banner at their trade show booth, "It's 11:00 pm. Do you know where your containers are?"

What is worth noting is that the problem seems to have become worse in recent years, an issue of note for companies wishing to reap the benefits of reusable packaging through years of reuse and resulting very low cost per use. One of the key reasons for the increased loss has been a rise in the black market for scrap plastic and metal. Empty reusable packaging left on unprotected loading docks or backs of retail outlets became easy picking for thieves, who would quickly cash in their haul from rogue recyclers. There are other reasons that also contribute to the loss of reusables, such as consolidation and increased distribution range of production facilities, greater supply chain complexity, and rapid employee turnover. 

The end result is that users of reusable packaging are having an increasingly difficult time keeping their losses of these items in check. here are some numbers I reported in a recent article on the extent of reusable packaging loss:

  • $52 million in beer keg losses annually in the United States
  • $80 to $100 million annually to replace missing milk crates in the U.S.
  • 30 percent loss rate of containers by commercial bakeries
  • 20 percent loss each year of plastic pallets and reusables by the U.S. Postal Service
  • 15 to 20 percent loss annually of plastic pallets and lids by the North American auto industry, with a loss of approximately $750 million annually for reusable packaging

    In aggregate, the loss of reusable packaging each year is in a range between $800 million and $1.5 billion. 

    In order to better understand the issue, I launched a reusable packaging user loss and theft survey, trying to better understand the issue. Probably the most telling signal from that survey was the shockingly low response rate, which to some degree speaks to the general lack of engagement around this issue.

    As for responses to the study, all respondents indicated that the loss of reusables is a problem, varying only in the degree of suffering. Around 39 percent of respondents said it was a serious problem for their company, while 61 percent said it was somewhat of a problem. About 69 percent of respondents felt that the loss situation for reusables had gotten worse in recent years. Not surprisingly, 76 percent felt that reusable packaging management does not get sufficient attention at their company, as opposed to 24 percent who felt it as sufficient. 

    In the final two questions of the survey, I asked respondents to identify some of the barriers or challenges to improving their reusable packaging program, and to the steps they were taking to ensure its success. Tellingly, the challenges facing their programs, such as competing priorities, lack of management interest, lack of training, and lack of employee accountability, were much more prevalent than steps actually being taken to correct poor performance.

    Although it is risky to draw conclusions from such a limited sample size, it seems evident that while companies are generally acknowledging that they have challenges around effective management of reusables, they likewise are taking few proactive steps to correct the problem. To the extent that they wish to curb the problem, taking some of the corrective steps listed in Question 5 of the survey should help interested companies in significantly reducing their loss problems with reusable packaging.