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Shipping Strawberries in Corrugated
Saves $6.6 Million Over Shipping In RPCs
ELK GROVE VILLAGE, IL (January 15, 2014) – Shipping fresh strawberries in corrugated containers costs 13 percent less than shipping the same volume of strawberries in reusable plastic containers (RPCs), according to a new economic case study. In the case scenario studied, an annual savings of $6.6 million was realized by shipping the strawberries in corrugated versus RPCs.
A large strawberry grower in Salinas, California, provided actual data to populate a cost-analysis tool, which analyzed total annual system costs. The case study compared the costs involved in using corrugated containers vs. RPCs to ship 144 million pounds of strawberries to Cincinnati, Ohio.
The analysis shows that RPCs incur $12 million higher trucking and handling costs than corrugated, due to RPC backhaul trip requirements, handling costs at return distribution centers (DC), plus washing costs, and higher trucking costs from farm to retailer to DC. The return trip for RPCs, which includes additional handling, trucking and washing, adds $8.3 million in costs that are entirely avoided by using corrugated containers. At an estimated $0.10 per container, washing alone adds $1.6 million to the annual cost of using RPCs.
Corrugated containers do not require backhauling because they are recovered for recycling after use at retailer locations. Supermarkets and retailers have helped propel corrugated recovery to an impressive 91 percent in 2012, and they earn revenue from the sale of used corrugated. Corrugated has long been the most recycled packaging material in the world.
The system cost savings from using corrugated containers is spread across supply-chain stakeholders. A study of the data using a special rental analysis module in the software shows that, in a typical leasing arrangement, the retailer pays $4.6 million (13 percent) more to receive the strawberries shipped in RPCs as opposed to corrugated. The grower pays $3.8 million (40 percent) more to ship in RPCs. So both growers and retailers save money when corrugated containers are used to ship strawberries in this case scenario.
Examining the relative costs and benefits of shipping-container alternatives requires a deep dive into all the cost factors involved along the supply chain. Case studies, like this one, detail the impact of major cost sensitivity factors on the total distribution system. They are significant, when considered on an annual basis. Shipping container economics now present a clear picture that corrugated containers offer the lowest-cost supply-chain solution.
The Strawberry Case Study is available for on the Corrugated Packaging Alliance website (www.corrugated.org).
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The Corrugated Packaging Alliance (CPA) is a corrugated industry initiative, jointly sponsored by the American Forest & Paper Association (AF&PA), the Association of Independent Corrugated Converters (AICC), the Fibre Box Association (FBA) and the Technical Association of the Pulp and Paper Industry (TAPPI). Its mission is to foster growth and profitability of corrugated in applications where it can be demonstrated, based on credible and persuasive evidence, that corrugated should be the packaging material of choice; and to provide a coordinated industry focus that effectively acts on industry matters that cannot be accomplished by individual members. CPA members include corrugated manufacturers and converters throughout North America.