The Hidden Costs of Packaging Damage

| BlackHawk Team

Have you ever thought about the true cost of a damaged package?

When a customer unpacks one of your products to find it has been damaged in transit, everyone loses. Beyond the obvious headaches — frustration, delays and returns — damaged products cost you money and actually hurt the environment. Consider:

  • Damaged products cost manufacturers approximately 1% to 2% of their total gross sales. This equates to an estimated $15 billion annually in lost revenue.
  • On average, one in ten ecommerce packages arrives damaged. Based on an annual volume of 8.6 billion packages shipped‡, that’s 860 million damaged parcels and reshipments.
  • Each reship consumes an estimated 1.7 gallons of fuel.
  • Each damaged product and its packaging adds an average of 10 lbs. to a landfill.

Think about your company’s lost revenue from shipping damages. How much money could you recover if you incrementally lower your percentage of damaged goods?

The truth is that some level of damage is inevitable. From the time a product is packed or palleted to the moment it arrives at its final destination, it endures the rigors of the supply chain: bumps and bangs from loading docks, forklifts, conveyors, trucks and human hands. Fortunately, damages can be mitigated if goods are packaged properly. But first you need to understand what causes the damages.

Analyze the damage data

What are your damage return reports telling you? Are your shipping containers the right size and are they sturdy enough for the contents? Does your packing process ensure that the goods are packed tightly without room to slide? Are palleted products wrapped and strapped securely? Are corners, sides and edges protected from scrapes and dents? Understanding what is causing damages gives you clues to help take corrective steps.

The box

Choose boxes and containers with sufficient room for the product and packing materials with minimal void space. Make sure the carton can support the weight of the contents and is rugged enough to withstand exposure to weather or moisture. Cartons must be marked THIS SIDE UP if this orientation is critical in handling. Same thing for FRAGILE.

Inside the box

Cover product corners, sides, edges, cords and fittings with protective material. Seal spare parts in plastic bags. Pack goods securely using foam, air pillows or packing paper to fill void space. Leave no wiggle room for the contents to slide during transit and handling.

Outside the box

Use quality materials to wrap items or boxes on pallets. Choose the correct stretch film and strapping for the loads you ship. Edge products protect corners and sides and add rigidity. Consider automating your processes with wrapping and strapping machines, case sealers, conveyors and printing machines. If packing manually, use commercial-grade sealing tapes and wrapping film.

Go green

Finally, use recyclable packing products. Encourage your customers to recycle packing waste.  To measure your green impact, request an EcoGauge Sustainability Assessment from Pregis.

†Source: Packaging World, 11/27/2013

‡Sources: UPS and Amazon.

Damaged Products = Damaged Planet

Damaged products and reshipments have a staggering ripple effect on the environment:

  • 5 billion pounds of returned ecommerce items end up in landfills every year
  • US businesses generate 55,000 metric tons of carbon dioxide per day from shipping
  • The yearly volume of damaged goods is enough to fill New York’s Central park 3 times (or 726 American football fields)
  • The cardboard used for packages shipped in the US consumes 5.7 million trees annually