Cost advantages of recycled packaging

Usually, when companies consider using recycled packaging, they mostly consider it from the perspective of reducing costs rather than reducing environmental pollution. However, the cost advantages of using recycled packaging are not necessarily applicable to all scenarios. For details, please refer to What scenarios are recycled packaging suitable for? This article helps companies systematically determine the cost advantages of using recycled packaging through the following 6 steps.

1. Identify potential products that can use recycled packaging

Companies should list products that need to be shipped frequently in large quantities and confirm the available recycled packaging products based on their size, shape and weight;

2. Calculate the total cost of using disposable packaging in detail

For the disposable packaging currently used, companies should calculate in detail the cost of purchasing, storing, handling and disposing of it, as well as the increased costs due to ergonomic limitations;

3. Prepare a recycling packaging geographic report

Prepare a recycling packaging geographic report by determining the transportation and delivery locations. Evaluate the daily or weekly "milk runs" and the use of recycling centers (sorting locations for sorting, cleaning and grading recycled packaging) caused by the introduction of recycled packaging.

4. Evaluate the options and costs of reusable packaging

Learn more about the various reusable packaging systems that may be used and estimate the costs of transporting and storing packaging containers in the supply chain. In addition, it is important to understand the life of the reusable packaging to evaluate the comprehensive unit cost of using reusable packaging.

5. Estimate the cost of reverse logistics

Based on the transportation and delivery points identified in the geographic report developed in step 3, estimate the cost of reverse logistics in a closed loop or managed open loop system.

If the company chooses to outsource the management of reverse logistics, the total cost of reverse logistics services through a third-party company should be obtained.

6. Conduct a cost comparison

Based on the information collected in the previous steps, conduct a preliminary cost comparison between disposable packaging and reusable packaging. This mainly involves comparing the costs determined in step 2 with the sum of the costs generated in steps 4 and 5.

In addition to these quantifiable costs, reusable packaging has been shown to reduce costs in other ways, including reducing product damage caused by packaging defects, reducing labor costs and injuries, reducing the space required for inventory, and improving productivity.

Of course, in addition to cost factors, the introduction of recycled packaging in the supply chain will undoubtedly have a positive impact on the environment. For companies with clear sustainable development goals, environmental factors may have a higher decision-making weight.

As a company seeking sustainable development in the field of recycled packaging, Kaichi Technology has always adhered to the concept of green packaging and increased its continuous investment in product and service capabilities to meet the various challenges raised by disposable steel drum users.