When comparing export packaging solutions, one of the most common questions is:
“How much does the packaging cost?”
But the purchase price of a pallet, box or protective component is only one part of the actual cost.
For manufacturers and exporters, the total cost of export packaging can also be influenced by transportation, packaging weight, warehouse space, handling, product damage, disposal and return logistics.
A packaging option with a lower unit price is therefore not automatically the lowest-cost solution.
The better question is:
“What will this packaging cost throughout the complete supply chain?”
Quick Answer: What Should Be Included in Export Packaging Cost?
A practical total-cost calculation can consider:
**Packaging Material Cost
– Freight Impact
– Transport-Space Impact
– Warehouse Cost
– Handling and Labour
– Product-Damage Risk
– Repacking and Operational Cost
– End-of-Life or Recycling Cost
– Return Logistics, where applicable**
The importance of each factor depends on the shipment and supply chain.
1. Start with Packaging Material Cost
The easiest cost to identify is normally the purchase price of the packaging itself.
This may include:
– Pallet or load platform
– Box or container
– Edge protection
– Honeycomb components
– Protective profiles
– Strapping
– Stretch film
– Dunnage
– Other supporting materials
For example, a complete transport packaging configuration may combine a Paper Pallet or Slip Sheet with Edgeboard, strapping and stretch film.
The total material cost should therefore consider the complete packaging system, not just one component.
2. Consider Packaging Weight
Packaging adds weight to every shipment.
This becomes particularly important when freight charges are influenced by shipment weight.
If two packaging systems provide suitable protection but one is significantly lighter, the difference can affect transportation efficiency.
Eltete positions lightweight paper-based packaging—including Paper Pallets and Slip Sheets—as alternatives that can reduce packaging weight in suitable applications.
Example
Imagine two acceptable packaging configurations:
Option A
Product: 500 kg
Packaging: 25 kg
Total: 525 kg
Option B
Product: 500 kg
Packaging: 8 kg
Total: 508 kg
The difference may appear small for one shipment.
But if the company exports hundreds or thousands of loads per year, packaging weight can become a meaningful part of the logistics calculation.
The actual freight impact should always be calculated using the company’s real transport rates.
3. Calculate the Cost of Shipping Empty Space
Weight is not the only consideration.
Volume also matters.
A packaging solution may occupy more container, truck or warehouse space than necessary.
Ask:
– How much space does each load occupy?
– How high is the packaging?
– Can more products fit into the available transport space?
– Does the load platform add unnecessary height?
– Can the packaging be right-sized?
– Are there large unused voids?
– Can components be stored flat before use?
Eltete’s packaging approach includes reducing unnecessary material and optimising transport and storage volume where the application allows it.
The objective should not simply be to use less packaging.
It should be to use the correct amount of packaging while maintaining the required protection and handling performance.
4. Calculate Container or Truck Utilisation
For export operations, small changes in packaging dimensions can affect how efficiently products fit into a container or truck.
Consider:
Number of units per container
rather than only:
Cost per packaging unit
For example:
If Packaging A costs less individually but allows only 80 products in a container, while Packaging B enables 90 products to be transported safely, the second solution may produce a different total logistics result.
This is why packaging dimensions should be considered together with:
– Product dimensions
– Pallet dimensions
– Load height
– Container dimensions
– Stacking requirements
– Required clearance
– Load stability
The objective is to evaluate the complete shipment configuration.
5. Include Warehouse Storage Cost
Packaging also occupies space before it is used.
Ask how much space is required to store:
– Empty pallets
– Boxes
– Protective components
– Returnable packaging
Packaging inventory
Bulky packaging can consume warehouse capacity even when no product is being transported.
Paper-based solutions such as Slip Sheets and selected flat or compact packaging components can offer storage advantages in suitable applications.
Therefore:
Packaging cost is not only what you pay to buy the packaging.
It can also include the warehouse space required to store it.
6. Include Handling and Labour
Packaging can affect how much work is required during:
– Assembly
– Packing
– Palletising
– Strapping
– Forklift handling
– Loading
– Unloading
– Unpacking
– Disposal
A packaging configuration that requires many separate components or complicated assembly steps may increase operational time.
Likewise, a packaging system that does not work properly with the company’s existing handling equipment may create additional work.
When comparing solutions, ask:
– How long does packing take?
– How many employees are required?
– Is assembly necessary?
– Does the forklift operation change?
– Does the customer require additional unloading equipment?
– How easy is the packaging to remove at destination?
These operational factors should form part of a total-cost evaluation.
7. Do Not Ignore Product Damage
The cheapest packaging becomes expensive very quickly if products arrive damaged.
Potential consequences can include:
– Replacement products
– Repacking
– Additional freight
– Customer complaints
– Delivery delays
– Rejected shipments
– Internal investigation
– Additional labour
– Lost production time
For this reason, reducing packaging material should never mean removing protection that is necessary for the application.
A better objective is:
Reduce unnecessary packaging while maintaining the required protection.
Components such as Edgeboard, Honeycomb Board, protective profiles and load-stabilisation systems can be used selectively according to the vulnerable areas of the product.
8. Calculate the Cost of Repacking
Packaging problems do not always result in completely damaged products.
Sometimes they create extra operational work.
Examples include:
– Replacing damaged cartons
– Reapplying stretch film
– Repositioning unstable loads
– Replacing broken pallets
– Adding additional corner protection
– Restacking products
Each activity requires:
Materials + Labour + Time
These costs may not appear on the original packaging quotation, but they still belong to the total cost of the packaging system.
9. Consider One-Way vs Returnable Packaging
The economic calculation can also change according to whether the packaging is:
One-way
or
Returnable
A reusable pallet may be appropriate where there is an established closed-loop system.
However, returnable packaging can also involve activities such as:
– Collection
– Return transportation
– Inspection
– Repair
– Storage
– Administration
For one-way exports where packaging will not return to the manufacturer, the calculation can be different.
This is why Paper Pallets, Slip Sheets and other paper-based transport packaging alternatives may be worth evaluating for suitable one-way export applications.
The best option depends on the complete supply chain rather than the packaging material alone.
10. Consider End-of-Life Handling
What happens to the packaging after the customer receives the product?
Possible requirements include:
– Sorting
– Storage
– Disposal
– Recycling
– Returning the packaging
– Separating different materials
A packaging design using compatible materials can potentially simplify handling at destination.
Eltete focuses on recyclable paper-based transport packaging solutions and identifies recycling and end-of-life handling as part of the wider benefits of its transport packaging approach.
The actual recycling process will depend on local recycling facilities and requirements at the destination.
A Simple Total Cost of Packaging Formula
A manufacturer can begin with the following framework:
Total Packaging Cost Per Shipment
Material Cost
Additional Freight Cost from Packaging Weight
Transport-Space Cost
Warehouse Storage Cost
Packing and Handling Labour
Expected Damage/Repacking Cost
End-of-Life Cost
Return Logistics Cost, if applicable
Estimated Total Packaging Cost
This is more useful than comparing only:
Pallet A = RM X
versus
Pallet B = RM Y
Example: Comparing Two Export Packaging Options
Imagine a manufacturer comparing two solutions.
Option A — Conventional Pallet System
Purchase cost:
RM X per shipment
Other considerations:
– Higher load-platform weight
– Larger empty-pallet storage requirement
– Possible return or disposal requirements
– Established forklift handling
– Option B — Paper-Based Packaging System
Purchase cost:
RM Y per shipment
Other considerations:
– Lower packaging weight may be possible
– Compact storage may be possible
– Paper-based recycling may be possible at suitable destinations
– Different design and testing requirements
– Handling compatibility must be confirmed
It would be incorrect to declare either option cheaper based only on RM X versus RM Y.
The company should calculate the total cost throughout its actual logistics process.
Questions Procurement Should Ask
Before choosing packaging based on price, procurement teams should ask:
1 – Packaging
– What is the complete packaging cost per shipment?
– How many components are required?
– How much material is being used?
– Can the packaging be right-sized?
2 – Transportation
– How much does the packaging weigh?
– Does packaging weight affect our freight rate?
– How many units can we load per container?
– Are we transporting unnecessary empty space?
3 – Warehouse
– How much storage space does unused packaging require?
– Can components be stored flat or compactly?
– How much packaging inventory must we maintain?
4 – Handling
– How long does packing take?
– Is additional equipment required?
– Will our existing forklift system work?
– Can the receiving customer handle the packaging?
5 – Product Protection
– Is the load sufficiently protected?
– Are the corners protected?
– Is the load stable?
– Has the packaging been tested?
– What happens if the product is damaged?
6 – Destination
– Is the packaging one-way or returnable?
– Does it need to be returned?
– How will the customer dispose of or recycle it?
These questions provide a much better comparison than simply requesting the cheapest pallet.
Where Can Paper-Based Packaging Reduce Costs?
Depending on the application, potential areas for optimisation may include:
– Material
– Using the correct amount of packaging rather than excessive material.
– Transport Weight
– Using lightweight transport packaging where appropriate.
– Transport Volume
– Reducing unnecessary load-platform thickness or packaging volume.
– Warehouse Space
– Using compact or flat packaging components where practical.
– Product Damage
– Applying protection specifically where products are vulnerable.
– Return Logistics
– Using suitable one-way packaging where a returnable system does no provide an advantage.
– Recycling
– Designing packaging with end-of-life handling in mind.
– Not every project will achieve savings in every category.
The purpose of the calculation is to identify which factors actually matter in the customer’s supply chain.
Cheapest Packaging vs Lowest Total Cost
These are not necessarily the same thing.
Cheapest packaging asks:
“What has the lowest purchase price?”
Total-cost analysis asks:
“Which suitable packaging configuration creates the best overall result throughout our logistics operation?”
That broader calculation may consider:
Material + Protection + Freight + Space + Handling + Storage + Damage + End-of-Life
This is a more useful way for manufacturers and exporters to compare transport packaging.
How Eltete Approaches Packaging Optimisation
Eltete Malaysia provides paper-based Transport Packaging Solutions for products during storage, handling and transportation.
Depending on the application, solutions may include:
– Paper Pallets
– Slip Sheets
– PallRun®
– EdgeRunner®
– Edgeboard
– Honeycomb Board
– Protective Profiles
– Dunnage Bags
– Other customised paper-based packaging components
The objective is to evaluate factors such as:
– Product dimensions
– Product weight
– Load distribution
– Handling method
– Storage
– Transportation
– Destination requirements
– Protection requirements
and develop an appropriate packaging configuration for the application.
Frequently Asked Questions
Q – What is the total cost of packaging?
A – The total cost of packaging includes more than its purchase price. Depending on the application, businesses may also need to consider freight, transport space, warehousing, labour, handling, product damage, recycling and return logistics.
Q – Is cheaper packaging always more cost-effective?
A – No. A low purchase price may be offset by higher freight, inefficient storage, additional handling or product damage. The complete logistics process should be evaluated.
Q – Can lightweight packaging reduce freight costs?
A – It can contribute to lower shipment weight in applications where freight charges are influenced by weight. The actual saving depends on the packaging configuration, shipment and freight-pricing method.
Q – How can packaging reduce warehouse costs?
A – Compact, flat or space-efficient packaging can reduce the storage volume required for unused packaging, depending on the product and warehouse operation.
Q – Can Slip Sheets reduce packaging costs?
A – Slip Sheets may provide material, transportation and storage advantages in suitable palletless-handling applications. Compatible handling equipment and destination requirements must also be considered.
Q – Should product damage be included in packaging cost?
A – Yes. Damage, repacking, replacement shipments, complaints and rejected deliveries can create additional costs and should be considered when evaluating packaging performance.
Look Beyond the Price Per Pallet
The best transport packaging decision should not begin and end with:
“Which pallet is cheaper?”
Instead ask:
“Which solution gives us the lowest appropriate total cost while protecting the product throughout the supply chain?”
A more complete evaluation considers:
**Packaging Cost
– Freight
– Space
– Warehouse
– Labour
– Handling
– Damage
– Recycling
– Return Logistics**
By analysing these factors together, manufacturers and exporters can make better-informed packaging decisions.
Contact Eltete Malaysia to discuss your existing transport packaging, product load and logistics requirements and evaluate opportunities for packaging optimisation.
