Research shows that companies suffer from substantial losses of their Returnable Transport Items, driven by mismanagement, theft, or other neglect. In other words, they aren’t aware of the high costs associated with these Returnable Transport Items. The term RTI covers all multi-use transport items, such as: pallets, containers, carts, trays, kegs, cylinders, baskets, crates, cases, and many others that support the efficiency and efficacy of transport and / or storage of the main product. Based on surveys and case studies the direct cost related to loss and theft range between 10-30% of the pool of registered items.
Returnable Transport Items losses
Different sectors witness different levels of losses and theft, likely driven by the complexity of the supply chain and the applied control structures within each industry. Some recent data from the United states suggest that these levels are eye watering:
- The automotive sector loses roughly 15 to 20 percent of its pallets and lids annually, according to a Deloitte study.
- The cost of replacing reusable packaging and pallets in North American auto industry is around $750 million a year according to the Auto Industry Action Group
- In the food and beverages industry, the costs are also substantial according to a Rehrig Pacific white paper:
- Beer keg losses total over $50 million
- Milk crate losses nearly $100 million
- Bakeries loose about 30% of the plastic containers
- In total, plastic pallet and container loss within the U.S. is estimated to be between $800 million and $1.5 billion annually.
These costs are based on surveys in America. In the rest of the world the percentage of losses will not deviate much.
Indirect costs of RTIs
In addition, there are often indirect costs associated with the losses and inefficient management of RTIs resulting in shortages of returnable transport items in the supply chain. Shortage of RTIs can:
- Hamper production operations resulting in expensive downtime costs
- Delay order processing and delivery, resulting in additional handling and shipping costs, and potentially lost sales
- Require emergency purchase of substitute expendable load carriers or replacement RTIs
To mitigate the risk of RTI shortage, companies often increase their pool of RTIs to ensure they do not run out. This increases the working capital of companies beyond what should be strictly necessary.
The above suggests that there are substantial gains in efficiency (and associated cost) to be found in the use of RTIs. More strikingly, the awareness of these inefficiencies seems to be rather low. In fact, most companies appear to consider such losses as inevitable. They dismissed them as “simply a cost of doing business”.
Reduce losses
However, with the right registration and administration, companies can quickly curb unnecessary costs related to losses and release excess working capital tied up in large pools of RTIs. TellApe supports companies in these efforts: it offers quick and easy registration and administration for any type of RTI based on a mobile application and insightful web based platform. TellApe is part of Tconsult, a Dutch firm focused on smart logistic solutions, with a particular focus on Returnable Transport Items.
About TellApe
TellApe helps companies create real-time load carrier insights. The TellApe app and the online portal ensures that you retain in full control over your business packaging. The online portal of TellApe immediately shows your current stock, incoming and outgoing load carriers. In the app, a driver or loading and unloading worker register the load carrier transactions. Two parties can come to an agreement about the transaction in the app. This transaction can be viewed real-time in the portal.
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