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INDIANAPOLIS, Ind. -- A new study conducted on behalf of the Corrugated Packaging Alliance here by Heads Up Systems, Inc., concluded that shipping iceless broccoli in Corrugated Common Footprint (CCF) containers saves retailers and grower/shippers 27 percent in total supply-chain costs, compared to shipping in reusable plastic containers (RPCs).
The study is the fifth in a series of studies sponsored by the Corrugated Packaging Alliance (CPA).
Using data provided by a California grower and a large grocery retailer, the iceless broccoli study compared total shipping and handling costs using CCF containers and either purchased or leased RPCs.
The research company contracted by CPA used "Full Disclosure," a sophisticated, activity based cost modeling tool, to evaluate total annual costs for shipping 34 million pounds of iceless broccoli 2,000 miles (approximately the distance between Salinas, Calif. and Atlanta). The analysis concluded that in this scenario, shipping in CCF containers saved retailers and grower/shippers more than $2.7 million annually, compared to RPCs.
In the iceless broccoli analysis, total supply chain costs for packaging, handling and distribution amounted to $7.1 million in modular CCF containers, vs. a total cost of $9.8 million in RPCs -- a difference of more than $2.7 million or 27 percent of the total cost. The difference is even greater, $2.9 million or 29 percent more, when rental costs for RPCs are included in the comparison.
The cost comparison showed that using RPCs costs more than corrugated during the first and second stages of the distribution cycle, when the product travels from the grower/shipper to a distribution center and then to retail locations. The increased cost, so says the study, is due to higher container, transportation, and handling expenses. Once the container reaches the store, corrugated is recovered for recycling, incurring no further costs and even earning revenue for the retailer.
RPCs, however, continue to accrue additional costs in sorting, washing, repairing, and backhauling to locations where they will next be used, the study said. In the iceless broccoli case, RPCs incur an additional $788,000 in trucking and handling costs to get from the store back to the user.
The retailer bears substantial added costs -- $2.5 million annually, or $1.71 more per container -- to ship in RPCs rather than in CCF containers, according to the study, which also found grower/shippers' net costs increasing by $435,677 (or $.29 per container) using RPCs instead of corrugated, due to higher container and handling costs. The pool operator generates a small profit of $68,146, which raises questions about the long-term sustainability of its currently documented rental rates.
For more information on the CCF and Full Disclosure studies, visit the Corrugated Packaging Alliance at http://www.corrugated.org.