Wal--Mart has for several years now pushed the use of returnable plastic containers from the field all the way through the supply chain onto store displays. And, where Wal--Mart goes, so does everyone else, eventually.
Already, several other supermarket chains have followed suit, displaying their produce in RPCs. The trend reduces labor and potential produce damage by cutting down on handling.
This is just one of the advantages of RPCs, say its proponents. And with Wal--Mart on board, RPC manufacturers are looking forward to growing market share.
One--touch merchandising—as produce moves through the supply chain in RPCs—is one of the more popular reasons that companies select RPCs over single--use corrugated containers. "When you use RPCs from the field on through to the stores, you have less product handling," says Per Oshtrom, director of marketing at CHEP USA, Orlando, FL. "This eliminates the need for knocking down boxes and setting up displays. Retail stores can realize significant labor savings with this method."
Damage reduction can be big as well, adds David Rodgers, vice president of sales and marketing at Orbis Container Services in Arroyo Grande, CA. "With the reduction in product handling, you can cut shrink by up to 2 percent," he says.
RPCs also cut down on packaging costs and waste, says Eric Fredrickson, sector manager at IPL Material Handling, Worcester, MA. "A single, reusable container can replace 100 single--use containers," he says. "One RPC costs much less than 100 single--use containers. Plus, single--use containers generate waste each time they are used. It all comes down to resource utilization—RPCs are much more efficient."
Fredrickson says that another RPC advantage is its ability to better protect the produce it carries. "By nature, they are much stronger than single--use containers because they are designed to last for many years," he says. "This means that RPCs can better sustain weight shifts in transit or damage inflicted by lift trucks and other sources."
Cleanliness is another benefit of RPCs, says Frank George, business development manager at Linpac Materials Handling, Georgetown, KY. "Using plastic materials removes the risks of contamination in corrugated boxes and wood, as well as other concerns such as corrugated dust and wood chips/splinters," he says.
Energy savings and environmental benefits also result from RPC use. A study commissioned by the Returnable Plastic Container Coalition revealed significant savings in these areas. All of these factors make an easy case for RPC manufacturers to argue the benefits of RPCs. "Any application where single--use containers are used successfully, RPCs can do better," says IPL's Fredrickson.
In spite of the benefits touted by RPC manufacturers, RPCs are still fighting an uphill battle for market share with single--use containers. Rodgers of Orbis estimates that total market share is around 8 percent to 10 percent and growing. "As retailers continue to get on board, RPC utilization is going up," he says.
Fred Heptinstall, senior vice president and general manager at IFCO Systems' RPC division in Tampa, FL, says that market share is growing rapidly. "Just nine years ago, market share was almost non--existent. Today we're around 7 percent."
Right now, RPCs make about 115 million trips per year, but Heptinstall predicts that they could be making more than a billion trips a year within the next 10 years or so.
CHEP's Oshtrom agrees, saying that market share is growing "at a clip of about 15 percent to 20 percent a year."
Designed For Efficiency
"To keep market share growing, RPC manufacturers are continually looking to improve thier designs. One of the latest steps many manufacturers have taken is to strengthen the containers' walls. Because the trend is to use RPCs all the way through the supply chain, most manufacturers are working to develop more durable containers," says Fredrickson.
Scott Schimming, industry manager at Rehrig Pacific Co., Los Angeles, says that improvements have been made to RPCs to save additional time and money. "RPCs have evolved greatly in the past 10 years," he says. "They're now easier to assemble, easier to collapse, compatible across a wider range of packaging, and are more efficient in backhauls."
Oshtrom says that because RPCs all tend to look similar, manufacturers are now incorporating space for labeling. "This allows for companies to distinguish their RPCs from others," he says. "We're also working on individual barcodes and color codes for improved tracking."
This improved appearance also serves as a marketing advantage, says George.
Most manufacturers are looking into ways to incorporate radio frequency identification (RFID) technology into their RPCs as well to provide a more sophisticated method for tracking. As with other areas of RFID, using the technology with RPCs is still some time in the future as price and standard issues are worked out.
Once the kinks are worked out, however, RFID should have a positive impact on the RPC industry. "An RPC with an embedded RFID chip can last five to 10 years," says Schimming. "That means the supply chain can see a savings in packaging costs as well as avoid the unnecessary expense of slap--and--stick RFID tags for corrugated that only have a one--time use."
A key design improvement that all manufacturers have made is the adoption of a common footprint (60 by 40). "This makes the RPCs from any manufacturer capable of cross--stacking," says IFCO's Heptinstall.
Rehrig's Schimming says that im--proved nest efficiencies mean more collapsed containers on backhauls, which leads to savings in money and freight. "Containers are no longer cumbersome to erect and/or collapse," he says.
Finally, RPCs now have smoother walls and bottoms to help reduce product damage. Improved ventilation is also a part of today’s designs, allowing for a wider range of commodities.
A wide variety of companies in the food industry are putting RPCs to use these days. "Large retailers have seen significant labor savings in their supply chain as a result of implementing RPCs," says Schimming. "Smaller grower/shippers and repackers can utilize RPCs internally or in regional loops and can greatly decrease their packaging costs."
In addition, RPCs have grown in use across a wider commodity range. "The industry is seeing fewer RPC sizes handle more commodities and more packs, such as strawberries, bananas and head lettuce," Schimming adds.
While produce makes up the bulk of RPC usage, manufacturers are constantly looking to match the containers to new commodities. "Produce is seasonal, so we're trying to design RPCs to be flexible," says Oshtrom. "By doing this, we will be able to use RPCs for a wider variety of items."
The main RPC selling point remains, however, the fact that they can go from "field to shelf" fairly easily. "The 'one--touch' model does provide the greatest opportunity to eliminate costs in the supply chain," says Schimming. "If a grower/shipper packs an RPC in the field and it later ends up on a store shelf, there is a significant reduction of labor and produce handling in the supply chain. There is a cost savings gained as well as an improvement in the produce quality at the store shelf as a result."
Environmental Advantages: RPCC Study
Because many businesses and industries have made continuous environmental improvement a principle, the Reusable Pallet & Container Coalition (RPCC) recently commissioned a study to identify the energy, wastes and emissions associated with RPCs and display--ready common footprint corrugated boxes (DRCs).
The study was conducted by Franklin Associates and in October 2004, the "Life Cycle Inventory of Reusable Plastic Containers and Display--Ready Corrugated Containers Used for Fresh Produce Applications" was released.
The study provided a cradle--to--grave analysis of RPCs and DRCs as they were used for shipping fresh produce. Ten different high--volume produce applications were analyzed. The functional unit was 1,000 short tons or 2 million pounds of each type of produce hauled between grower and retailer.
The study turned up several interesting findings, including the following:
The study also fond that multiple trips, or turns, in an RPC closed operating system lead to materials efficiencies that create relatively low environmental burdens. In the DRC system, a container is manufactured for each trip to retail Even when recovery and recycling rates for DRCs are high, the production step, including recycling, creates a higher level of burdens. In the case of RPCs and DRCs, multiple reuses of RPCs result in lower environmental burdens than single--trip DRC containers.
Based on the findings of the study, the RPCC concludes that for produce applications, reuse with a closed--loop recycling at end of life is the most efficient means of reducing not only solid waste, but also energy use and green--house gas emissions.