IBS3002 Logistics & International Trade

Chapter 6
Packaging for export & material handling

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Contemporary logistics, Murphy (2015) & International logistics, Pierre David (2011)
Topic areas

 Introduction to Packaging
 Packaging for Each Mode of Transportation
 Security
 Hazardous Goods
 Refrigerated Goods
 Packaging as a Marketing Tool
 Material handling

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Product characteristics

 Various product characteristics can influence packaging and materials handling

considerations
 Physical characteristics:
+ Substances forms – solid, liquid, gas
+ Ability to withstand exposure to elements (rain, freezing conditions)
+ Product density (weight per volume)
+ Respiration
 Chemical characteristics:
+ Incompatible products (products emitting ethylene)
+ Products requiring chemicals for its delivery 3
Product characteristics

 The various properties of goods must also be made known to consumers to help them make
the correct buying decision and care for the product properly

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Packaging fundamentals

 Packaging refers to materials used for the containment, protection, handling, delivery and
presentation of goods
 Building-blocks concept: a very small unit is placed into a slightly larger unit, which then
might be placed into a larger unit, and so on
 The building-blocks hierarchy is important to remember because each of the different
building blocks is inside another, and their total effect should be to protect the product
 Three packaging fundamentals that organizations should be aware of: functional trade-offs,
package testing and monitoring, labeling

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Packaging fundamentals – Functional trade-offs

Packaging has three functions:

• It protects the goods during transport
• It allows the handling of goods without damage
• It is part of the customer service strategy of the firm: good packaging reflects positively
on the exporter’s firm.
Although the costs of packaging generally increase as the protection of the goods increases, it
is important to remember that insurers will deny damage claims if they observe improper
packaging.
Packaging is always the responsibility of the exporter, regardless of the Incoterms® rule used
in the transaction
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Packaging fundamentals – Packaging testing & monitoring

 A package system requires 3 types of information to design:

- The severity of the distribution environment
- The fragility of the product to be protected
- The performance characteristics of various cushion materials
 The packages are subject to tests that attempt to duplicate all the expected various shipping
hazards: vibration, dropping, horizontal impacts, compression, overexposure to extreme
temperatures or moisture, and rough handling

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Packaging fundamentals – Labeling
 Packaging labeling occurs at the end of the assembly line. This is a key point for control
because it consists of:
+ Retroflective labels
+ Batch numbers
+ Weight
+ Specific content
+ Instructions for use
+ Information to allow passage through customs
+ Compliance labeling
+ One-or two- dimensional bar codes
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+ Smart labels or RFID labels
Packaging fundamentals – Labeling

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Packaging fundamentals – Labeling

 Hazardous materials:
+ Governmental regulations address labeling of hazardous materials
+ Requirements involve:
- labeling
- packaging and repackaging
- placing warnings on shipping documents
- notifying transportation carriers in advance
+ Globally Harmonized System of Classification and Labelling of Chemicals (GHS) is a
global system to classify and label hazardous materials

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Packaging terminology

• Primary packaging is what the final consumer sees.

• Secondary packaging is what the retailer/wholesaler handles.
• Tertiary packaging is what is used for transportation. 11
Packaging terminology – Tertiary packaging

There are three objectives of proper tertiary packaging:

• Protect the goods in transit from mechanical damage: breakage, crushes, nicks, and dents
(these perils represent roughly 43 percent of all claims made by shippers to their
insurance companies).
• Protect the goods from water damage: sea water, rain, floods, and container sweat (15
percent of claims made).
• Protect the goods from theft and pilferage (21 percent of claims made).

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Ocean cargo packaging

Shipments that are small in size and weight can either be full-container-load (FCL) or less-
than-container-load (LCL):
•An FCL shipment utilizes the entire capacity of a container, whether it is by weight or by
volume.
•An LCL shipment utilizes less than the entire capacity, and is mixed with other goods, so that
an entire container can be utilized. The other goods are from other shippers, and the remainder
of the container is filled by a consolidator or a Non-Vessel-Operating Common Carrier.
Shipments of packaged goods that are not placed in a container are called “break-bulk”
shipments.

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Ocean cargo packaging

FCL ocean cargo should be unitized, so the use of mechanical

equipment is necessary to move the goods as a unit. Most often, this is
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done with a pallet.
Ocean cargo packaging

Pallets that are well constructed allow the goods to be protected during handling.
Poorly-assembled pallets (mismatched cartons, no stretch wrap, no corner
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protection) give a poor image of the exporter.
Ocean cargo packaging

FCL palletized cargo should be prevented from moving in the container by using
dunnage or blocking. Inflatable dunnage is always of the right size.
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Ocean cargo packaging

If the cargo does

not fill the
container
completely, the
goods should be
centered in the
container and
solidly braced
against the walls.

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Ocean cargo packaging

 FCL Ocean cargo

FCL cargo should be loaded according to the following rules:
• The center of gravity should be at the center of the container, front-to-back, and side-to-side.
• The heavier items should be at the bottom.
• The goods should be braced with blocking or dunnage.
• The goods should be placed on pallets or dunnage to raise them above the floor of the
container (to protect them from water damage).
• A desiccant should be used to protect from ambient humidity.

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Ocean cargo packaging

 LCL Ocean cargo

 LCL cargo should be even better protected than FCL cargo. The goods are likely to be
handled more frequently and be placed near goods that may not have been well packaged.
 LCL cargo should be boxed or crated with strong corners (in case another cargo is placed on
top of it), protected from humidity with shrink wrap or stretch wrap, and well marked with
handling instructions.

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Ocean cargo packaging

Crates and boxes used for LCL cargo. 20

Ocean cargo packaging

Two means of recording whether a box

was mishandled in transit.
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Ocean cargo packaging

 Breakbulk Ocean cargo

 Breakbulk cargo (general cargo) is not placed in a container, but is placed directly into the
hold of a ship. It is generally too large or too heavy to be placed in a container.
 Breakbulk cargo must be packaged so that it can be handled at all steps of the voyage. Most
of the time, it is placed in crates or boxes.
 Some breakbulk cargo is placed on flat-top containers if it is small enough to be placed on
top of a stack of containers.

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Ocean cargo packaging

Breakbulk goods are placed directly in the cargo hold of a breakbulk ship.
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Some are in boxes.
Ocean cargo packaging

 Breakbulk Ocean cargo

 Breakbulk packaging alternatives includes unitized packages that can be handled by human
labor, such as bags, bales, or drums, and those can be only be handled with mechanized
equipment, such as flexible intermediate-bulk containers and rolls.
 Some breakbulk cargo is actually not packaged at all and the goods are placed directly in the
ship’s hold.

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Ocean cargo packaging

Cocoa beans bags placed directly in the

cargo hold of a ship. 25
Ocean cargo packaging

Cotton packaged in bales in a

warehouse awaiting shipment.26
Ocean cargo packaging

Tapioca packaged in flexible

intermediate-bulk containers. 27
Ocean cargo packaging

Rolls of paper unloaded with

a vacuum system. 28
Ocean cargo packaging

Granite blocks in the port of

Sète, France, and on their way
from the port to a finishing
plant.
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Ocean cargo packaging

 Breakbulk cargo markings

 The International Plant Protection Convention (IPPC) mandates that wood used for packing
or dunnage be treated with chemicals to prevent insect infestations.
 Marking international shipments with international handling pictorials help protect them
from poor handling (they are not language specific), as well as from theft and pilferage.

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Ocean cargo packaging

The International Plant Protection Convention (IPPC) mandates

that wood used for packing or dunnage be treated with
chemicals to prevent insect infestations. 31
Ocean cargo packaging

Marking international shipments with international handling

pictorials help protect them from poor handling, as well as
from theft and pilferage. 32
Ocean cargo packaging

 Bulk cargo
 Bulk cargo (dry or wet bulk) is cargo that is placed directly in the holds of the ship, without
packaging of any kind.
 Containerized cargoes and breakbulk cargoes are loaded and unloaded using cranes, one unit
at a time.
 In contrast, bulk cargo is loaded and unloaded with continuous methods such as vacuum
pumps, conveyor belts, pipes, augers, ...and so on.

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Ocean cargo packaging

Dry bulk cargo (grain) is loaded using a

conveyor belt and a chute. 34
Ocean cargo packaging

Dry bulk cargo (alumina) can be unloaded using a vacuum

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pump.
Air transport

 Air transport is less hazardous to cargo than ocean transport: nevertheless, cargo should be
well protected for air transport.
 Secondary packaging is not appropriate for air shipment because it does not sufficiently
protect goods during the flight and airport handling operations, and the commercial
markings of the packaging make the goods a tempting target for thieves.
 Air cargo containers are designed to facilitate the loading and unloading of aircraft, and not
to act as intermodal containers used in other means of transportation.

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Air transport

Air cargo containers are different from ocean cargo

containers and only facilitate handling. 37
Road and Rail transport

 Goods will generally travel by road for a portion of their international voyage, but the main
international carriage can be by ocean, air, or rail. Packaging needs are dictated by the main
mode of transportation.
 Rail transportation requires the same level of packaging as ocean transportation; goods are
subjected to sudden accelerations and decelerations, as well as exposure to bad weather and
changing temperatures.
 Rail companies provide packaging guidelines for shippers.

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Road and Rail transport

Container cargo traveling by rail should be as carefully

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braced as it is for ocean transportation.
Security

 Packaging security issues center around pilferage and theft.

 Good packaging security practices include:
• Tamper-proof seals on all FCL shipments.
• Measures designed to hide the nature of the goods being shipped (making secondary
packaging “anonymous”).
• Measures designed to keep shipment information confidential.

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Security

Container seals:
the top one is a
bolt seal, the
bottom one is a
wire seal. Bolt
seals are required
for shipments to
the United States.

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Dangerous goods

 Hazardous cargo can be shipped by ocean and by air, but most dangerous goods (flammable,
explosive, or toxic goods) are shipped by ocean.
 If they are containerized, they are shipped “above deck” rather than “under deck.”
 The shipment of dangerous goods by sea is regulated by the International Maritime
Organization.
 The shipment of dangerous goods by air is regulated by the International Air Transport
Association (IATA).

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Refrigerated goods

 Goods requiring refrigeration make up another category of cargo that demands particular
care and specialized packaging services.
 Refrigerated goods usually require very specific handling, and therefore, most refrigerated
goods travel “alone,” and are not mixed with other refrigerated goods.
 Goods requiring refrigeration are placed in refrigerated containers that are self-powered, or
powered through the ship’s electrical system. They can also be placed in refrigerated holds
in the ship.

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Security

Reefers sometimes include shelves to facilitate

air circulation and prevent temperature
differences in the unit. 44
Security

Refrigerated cargo can travel by refrigerated ship; a ship

designed to transport fruit juice. 45
Retail packaging issues

Consumer packages (primary packaging) may need to be different from country to country to
accommodate consumer preferences.
•Packaging Size
Consumer preferences dictate packaging sizes: products are smaller in countries in which
retail shopping is done frequently, and larger in those in which consumers shop at greater
intervals.
•Packaging Design
The customary design of the package for a type of product may be different. The color
preferences may be different. The shape or materials of the package may be different.

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Retail packaging issues

Consumer packages (primary packaging) may need to be different from country to country to
accommodate legal and environmental requirements.
•Legal requirements
Legal requirements influence the sizes of packages; some countries require multiples of
simple metric units (one kg or one liter).
•Storage and Transportation Environment
There are a number of environmental factors, such as high humidity, heat, or cold, that
influence the design and materials used in primary packaging.

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Retail packaging issues

Secondary packaging may need to be different from country to country to accommodate trade
requirements.
•Legal requirements
Laws may restrict the size of secondary packaging. For example weight must be kept below a
threshold, so that it can be handled by hand.
•Storage and Transportation Requirements
There may be a standard pallet size that dictates how large a secondary packaging unit must
be.

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Packaging as a marketing tool

A benefit of a good packaging policy is the goodwill that it generates with the importer, and the
marketing benefits that can be derived from it.
Importers welcomes shipments that arrive packaged carefully enough that they do not have to
worry about having to challenge invoices or ask for the replacement for damaged goods.
Good packing enhances the relationship between exporter and importer, and builds trust.

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Unit loads in materials handling

 A unit load (unitization) refers to consolidation of several units (cartons or cases) into larger
units to improve efficiency in handling and to reduce shipping costs
 Handling efficiency can be facilitated by mechanical devices (pallet jack or forklift) as well
as by using a pallet or skid

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Unit loads in materials handling

 Advantages
• Additional protection
• Pilferage is discouraged
• More fragile items can be stacked inside the load
• Mechanical devices can be substituted for hand
 Disadvantages
• Provides large quantity that sometimes is of limited value to resellers dealing in smaller
quantities
• Must use mechanical or automated device to move

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Unit loads in materials handling

 Basic unit is a pallet or skid

- Can be constructed from wood, wood composites, plastic, paper, and metal
- Each pallet materials has advantages and disadvantages
- Should be less than 50 pounds
 Pallet or skid alternatives
- Slip sheet - a flat sheet of either fiberboard material or plastic, which is placed under the
unit load
- Shrink wrap - plastic wrapping that when heated shrinks in size to form a cover
over the product

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Unit loads in materials handling

 Beyond the unit load

- Use of load-planning software
- Bracing
- Inflatable dunnage bags
- Load is subjected various forces including:
+ Vibration
+ Roll
+ Pitch
- Weighing out
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Unit loads in materials handling

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Materials handling

 Materials handling refers to the “short-distance movement that usually takes place within the
confines of a building such as a plant or DC and between a build and a transportation service
provider”
 How the products are handled depends on whether they are packaged or in bulk
 Handling may change the characteristics of the product

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Materials handling principles

 Materials handling principles:

- Planning - Space utilization
- Standardization - System
- Work - Automation
- Ergonomic - Environmental
- Unit load - Life cycle cost

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Materials handling equipment

 Two categories of handling equipment

- Storage equipment - Handling equipment
+ Shelves + Conveyor systems
+ Racks + Lift trucks
+ Bins + Carts, cranes

 The choice of handling equipment can influence the type of storage equipment
 The choice of storage equipment can influence the type of handling equipment

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Materials handling equipment

 Material handling equipment can also be categorized as:

- Labor intensive
- Mechanized
- Automated
 Sufficient volume is needed to justify high cost of automated equipment
 An organization’s order picking and assembly system can also influence the type of
handling equipment
- Picker-to-part systems - an order picker goes to where a product is located
- Part-to-picker systems - the pick location is brought to the picker

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