Damaged goods? Damaged reputation

Perhaps the single biggest threat to a packaging business is that of transit damage. It can also be amongst one of the most significant on-costs. In fact, in addition to the cost of returns and replacements, it can have an extremely negative impact on a customers’ satisfaction level, as well as on the reputation of the business involved. Damage in transit can also lead to poor brand perception, and eventually can limit a businesses’ potential for repeat sales and improved customer loyalty.

The true costs of not preventing transit damage can be significant. Whilst other factors come in to play, such as the quality of couriers and the distance items must travel, having to write-off even a small percentage of the products being shipped can cost thousands of pounds. However, this can sometimes be even more costly where expensive, high quality items are concerned. In fact, damage often goes far beyond just an individual packaging company’s reputation and that of its client. For example, when we consider consumer packaged goods, damage during transit can lead directly to a reduction of on-shelf availability and can also equate to a serious loss of sales.

Damage caused to items during shipping not only can incur a significant monetary cost with the returns and replacements, but also can create a negative perception amongst your customers. Besides this, everyone knows the frustration of receiving damaged goods. This is especially acute when they are critical to your business or operations. Add this to the admin associated with returning items and the costs of dealing with this and it can very quickly lead to unhappy clients. Happy customers tend to be loyal customers who spend more and will recommend you to their colleagues and friends. Customers that frequently receive damaged items won’t be inclined to continue to use your services, or at least, decide not to offer you any additional business. Therefore the impact on your business and its’ potential growth can be severe.

Protective packaging performance

SPN looked at the GWP Group’s operations, which is a leading specialist in packaging transportation. The company often works with businesses that are experiencing package protection problems. However, by analysing the product and the type of damage in detail, and applying their unrivalled experience and knowledge of transit packaging design, they provide cost-effective answers with considerable success In addition, GWP’s solutions are not only engineered to offer the optimal level of protection for a given product but can also engineer-out additional costs.

The GWP Group told SPN: “In many cases, using less of the right material is both cost effective and more efficient in terms of protection, than using more of the wrong material”.

Cause and effect

Whilst damage to items in transit can occur in a number of ways, there are three scenarios which are most common across most industrial market sectors. Firstly, and perhaps the most observed, is that of prolonged vibration or sudden impact during shipping. Depending on the fragility of the product and type of packaging used, this can either occur suddenly, causing breakage, or from prolonged or repeat handling during transportation leading to fatigue failure.

With the average e-commerce order having around 10 touch points prior to delivery, it is essential that packaging can withstand the rigours of a chosen courier network. Also, a fairly common contributor is damage resulting from poor pallet or load stability. This can be caused in transit by a vehicle cornering and breaking, or by stacking packaging too high, thus resulting in crushing or “bursting”.

Finally, and often overlooked, is damage caused to surfaces by abrasion. This can be through excessive vibration and surface contact between the product and its packaging, or even by product touching product, which typically affects printed, polished or painted surfaces.

A ready remedy

The GWP Group also said that by working alongside them, companies can take advantage of a wide range of technologies and software that will calculate the exact performance of any packaging that requires transportation. Businesses can benefit from proven strategies and a team of experienced designers that specialise in eliminating transit damage to your items. Ranging from how boxes can be safely stacked, to safe drop-heights and vibration, the use of specialist software or appropriate testing as required enables GWP to create not only the perfect structural design, but also select the optimal material to eradicate any damage.

Example of cost savings achievable

The infographic below highlights just how costly transit damage can be – significantly outweighing any cost savings from under-specifying your packaging.

Damage Prevention Example usage / cost calculations

Box Box (standard box) Box (standard box) Box (standard box) (standard box) Value Value (item value - TV) Value (item value - TV) Value (item value - TV) (item value - TV) Transit Transit (no. items delivered) Transit (no. items delivered) Transit (no. items delivered) (no. items delivered) Damage Damage (% damaged in transit) Damage (% damaged in transit) Damage (% damaged in transit) (% damaged in transit) Returns Returns (total no. items returned) Returns (total no. items returned) Returns (total no. items returned) (total no. items returned)

£1.00 each £1.00 each £1.00 each £1.00 each £500 £500 £500 £500 10,000 10,000 10,000 10,000 1% 1% 1% 1% 100 100 100 100

Calculations Calculations Calculations Calculations Total packaging cost Total packaging cost Total returns cost Total packaging cost Total returns cost Total returns cost Overall TOTAL Total packaging cost Total returns cost Overall TOTAL

£10,000 £10,000 £50,000 £50,000 £10,000 £10,000 £50,000 £60,000 £50,000 £60,000

Overall TOTAL Overall TOTAL £60,000 £60,000

Box Box (custom engineered packaging) Box (custom engineered packaging) Box (custom engineered packaging) (custom engineered packaging)

£1.75 each £1.75 each £1.75 each £1.75 each

Value Value (item value - TV) Value (item value - TV) Value (item value - TV) (item value - TV)

£500 £500 £500 £500

Transit Transit (no. items delivered) Transit (no. items delivered) Transit (no. items delivered) (no. items delivered)

10,000 10,000 10,000 10,000

Damage Damage (% damaged in transit) Damage (% damaged in transit) Damage (% damaged in transit) (% damaged in transit) Returns Returns (total no. items returned) Returns (total no. items returned) Returns (total no. items returned) (total no. items returned)

0.5% 0.5% 0.5% 0.5% 50 50 50 50

Calculations Calculations Calculations Calculations Total packaging cost Total packaging cost Total returns cost Total packaging cost Total returns cost Total returns cost Overall TOTAL Total packaging cost Total returns cost Overall TOTAL

£17,500 £17,500 £25,000 £25,000 £17,500 £17,500 £25,000 £42,500 £25,000 £42,500

Overall TOTAL Overall TOTAL £42,500 £42,500

+ 75% + 75% + 75% + 75% NA NA NA NA NA NA NA NA 50% 50% 50% 50% 50% 50% 50% 50% 29% 29% 29% 29% Cost Saving Cost Saving Cost Saving Cost Saving