Brand-New Bag

THREE YEARS AGO, Crate & Barrel executives knew they had to find a better way to pack the items they shipped to their distribution centers and to customers. The catch was that no one was sure there was a better way.

“In fact, we’re always on the lookout for something better,” says Jay Iaco, direct marketing packaging manager for Crate & Barrel’s distribution center in the Chicago suburb of Naperville. “We want to find the next big thing that’s going to replace peanuts.”

In this, Crate & Barrel is not alone. Fulfillment professionals, faced with unhappy customers and increasing environmental concerns, would be thrilled to find a cost-effective alternative to polystyrene peanuts. Over the past few decades there have been several notable advances in protective packaging materials, say consultants, manufacturers, and shippers. They list as examples peanuts, sophisticated paper fill, bubble packaging, and the inflatable void fill made by such companies as Sealed Air Corp., Pactiv, and Tuscarora. But for the most part, new products and technologies have made few inroads against cost-conscious, peanuts-dependent operations directors. New packaging technology is all very well and good, but too much of it requires capital investment, retraining employees, and retooling fulfillment and distribution centers.

A FILLER PRIMER Peanuts (made from polystyrene) have been around for almost 40 years. They are light and easy to use, which means that training and equipment costs are low. Distribution center managers agree that the peanut-filling process is so foolproof that even entry-level employees with a minimum of training can hold a blower over a box until the box is full of peanuts.

In addition, peanuts are effective at reducing damage. “That’s the key element,” says Al Bosma, molded-fiber product manager for UFP Technologies in Atlanta. “You can’t put a price tag on how the customers react when they get a damaged product.” Peanuts are also inexpensive, often pennies on the dollar compared to other package fills. Says Mike Bilder, president of Peacock Engineering in suburban Chicago: “In this business, a few pennies get everyone’s attention.”

According to figures from the Plastics Loose Fill Council, some 50 million lbs. of peanuts were manufactured in 2002. Exact market-share statistics (as well as exact cost figures for peanuts) are difficult to come by, but peanuts still appear to hold a lead in the package fill business.

“It’s an archaic technology, and I think there are a lot of better ways, but there is still tremendous resistance to switching from peanuts,” says Mark Swensen, executive vice president of Jacksonville, FL-based TMSi, a third-party logistics company with 20 distribution centers across the country. “The challenge comes in documenting that doing it a different way will make a difference.”

SELF-CONTAINED Resistance to change takes many forms. Bilder notes that many consumer-driven companies prefer not to spend time and money on packing their products, instead spending their resources on the brands themselves, on package design or in marketing.

A number of delivery companies approach the package-shipping equation from a completely different direction, says Karen Proctor, chairwoman of the package services program at the Rochester Institute of Technology. Their goal is to reduce handling mishaps — if shippers could reduce product damage en route, merchants would not need to worry so much about what kind of fill to use, and they would be able to use less of it. This would cut shipping costs because the package would be lighter, and it would also reduce handling costs.

Then there is exterior packaging, an area where the cardboard box is still king. In the past several years, designs have evolved from traditional cardboard containers to more sophisticated versions, and there has been significant movement, shippers and consultants agree, away from cardboard boxes for certain items. Cabela’s, the outdoor gear retailer, uses colored polybags to ship some clothing and footwear, says Dale Kettler, the shipping manager at Cabela’s Sidney, NE, distribution center. All the packers have to do is slap a label on the bag, and it’s ready to go. Other apparel companies use polybags when they’re shipping one or two easily handled items to the same address. Still others have opted for padded paper. A third container option, usually used to send books, is a cardboard wrapper that surrounds the product, removing the need for any kind of fill.

TIME AND AGAIN An even more intriguing prospect, says Proctor of the Rochester Institute, is the reusable box. Some electronics and computer vendors are testing to see whether they can pay their customers to return the box to them after the product arrives. This not only requires fewer boxes, but allows boxes to be standardized for each product, right down to the foam filler.

Reusable boxes are part of what Proctor calls a “total system view” toward reducing shipping costs: Solutions can come from any part of the supply chain, not just the package being shipped.

ANYTHING BUT PEANUTS But most merchants’ attention remains on finding alternatives to peanuts. Despite several improvements in technology and methods (including a nationwide recycling program that involves retailers, shippers, and peanut vendors, and which may send as many as one-third of all peanuts back to be reused every year), a lot of people still just don’t like them. Says Mark Dawson, director of marketing for Ranpak, a paper fill manufacturer in Painesville, OH: “Show me a DC with bubbles blowing around the loading dock, and I’ll show you someone who is a possible customer.”

Generally, the newest peanut replacements are of two kinds — some type of paper fill, whether a non-polystyrene peanut or Kraft papers, and inflatable plastic bags. (Note that these solutions do not include bubble packaging, which many shippers and retailers dislike as much as peanuts, especially for its relatively heavier weight.) Each has its advantages. Many kinds of papers compare favorably with peanuts with regard to cost. Inflatable bags, also light, are more expensive, although they too can be cost-effective. Both alternatives provide damage protection comparable to that provided by peanuts, and each material also scores more highly with consumers than peanuts.

Papers, in particular, allow expanded branding opportunities. Mike Suthard, vice president of marketing and sales for Geämi, a leading Kraft paper fill vendor in Morrisville, NC, says his company’s customers appreciate being able to add their logo and similar designs to the paper used as fill. “It gives retailers one more opportunity to put their brand before the customer,” he says.

The catch, of course, is cost. Inflatable fill and Kraft papers require their own special equipment to make them work. Papers need rollers and increased operator training; inflatable fill requires hoppers at pack stations to hold the filled bags, which come off a roller like sausage links. Many vendors, who include the new equipment as part of the total deal in a lease arrangement, point out that conversion costs can often be offset by productivity gains gleaned from more efficient techniques on the packing line associated with the inflatable fill, and from lower material storage costs. Swenson says that some TMSi clients who switched to inflatable fill have seen 6% to 10% increases in productivity.

Still, even companies that want to replace peanuts, like Crate & Barrel, face a difficult task. Iaco says his project to find something other than peanuts had several built-in advantages — a relatively new distribution center, where operations had not yet become overly bureaucratic; a mandate from management to look for something else; and DC space constraints, which made storing peanuts troublesome. And even so, Crate & Barrel still uses peanuts in addition to a three-ply Geämi product. The latter, he says, is cost-comparable to peanuts but requires packers on the line to use a sophisticated block- and-brace technique, which isn’t as simple as blowing peanuts into a box.

“So far,” says Iaco, “no one has really been able to come up with anything better.” But that doesn’t mean they won’t keep trying.

Jeff Siegel’s articles have appeared in Forbes, American Way, and other business and consumer magazines. He lives in Dallas.

To Fill the Void

FillPak from Ranpak Corp. is a one-ply system that produces paper fill at high speeds, which allows it to compete with peanuts on the basis of cost.

Cushion Cubes from UFP Technologies are cube-shaped packaging materials made from 100% recycled paper fibers, such as newspaper, and water. The cubes are easily disposable, biodegradable, and non-static. They provide blocking and bracing support, cushioning protection, and function as void fill.

Die-cut Kraft papers from Geämi. Several retailers, including Crate & Barrel and Restoration Hardware, have tried Geämi’s die-cut Kraft paper technique. The paper is cut with thousands of slits, which expand into hexagonal cells to form a three-dimensional cushioning material that is produced as needed — much like bubble packaging without the plastic or the bubbles.

Self-seal corrugated boxes from Atlas Packaging. This Miami designer/manufacturer says its customers are increasingly looking for faster and more ergonomically friendly ways to package their products for delivery. One favorite is a self-sealed mailer about the size of a large checkbook. The product, used for smaller items like CDs or drugs, reduces the need for fill, and has cut material costs while boosting productivity.

Fill Air RF inflatable packaging, a void fill system developed by Sealed Air Corp., features six sizes of reusable bags and requires only a 110V outlet to operate. Operators can inflate bags with the exact amount of air necessary for a given space.

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