What are the main challenges facing the reusable industrial packaging sector today?
The reusable industrial packaging industry is global in scope, and composed of many hundreds if not thousands of companies doing business in varying economic environments. It is, therefore, difficult to make sweeping statements about challenges the industry faces, but I will, nonetheless, give it a go.
Consolidation is perhaps the most obvious issue facing reconditioners in many parts of the world. Until fairly recently, most reconditioners were family-owned enterprises with one or two locations. Today, several companies are actively buying or creating partnerships with reconditioning businesses all over the world. It is difficult to predict how consolidation will impact the business of reconditioning over the long-term, but I expect this activity will continue apace for the foreseeable future.
Another major challenge is educating packaging users about the benefits of ordering packagings that are robust and capable of being reused many times. Anyone familiar with the tenets of the Circular Economy movement knows that reuse is by far the most preferable option for the management of used packagings. For example, a recent study by Ernst & Young found that reusing an average open head 55-gallon (210 liter) steel drum reduces carbon emissions by about 60% when compared to the single use option.
How will these matters evolve over time?
With regard to industry consolidation, as I mentioned earlier, I believe we are looking at a process that, while certainly no longer in its early stages, is likely to continue for quite some time. The companies at the forefront of the consolidation effort are multi-national in scope and are focused on providing both national and global reuse solutions to their customers. I think it is important to say that there is now and will continue to be plenty of room in the global marketplace for smaller, nimble reconditioning companies. Reconditioners are highly entrepreneurial and they always find a way to both survive and thrive, no matter the business challenges they face.
With respect to environmental issues, I believe that ever greater numbers of companies all over the world are beginning to understand and appreciate the benefits associated with industrial packaging reuse, as opposed to sending once-used packaging to the scrap yard. Reuse far and away the most environmentally sound practice for nearly all industrial packagings.
Today, nearly every major corporation is working to improve its environmental profile. As part of this process, many firms are taking a close look at their industrial packaging options. I predict that as this process continues, and companies begin to assess carefully the air, water and carbon savings associated with packaging reuse, they will begin to purchase more packagings that have long lifetimes and also purchase more reconditioned packagings.
How is RIPA responding to these trends?
A couple of years ago, RIPA commissioned a study by Ernst & Young comparing the carbon emission (CO2e) impacts of a new industrial packaging and a reconditioned packaging of similar technical specifications. The results were nothing short of astounding. As I noted above, the use of reconditioned open head steel drums cut emissions by about 60% over a similar new drum; and, a reconditioned composite IBC saves about 65% of carbon emissions over a similar new IBC. RIPA is working hard to get these facts in front of corporate environmental officers and purchasing managers all over the world.
In addition, we are developing a new program designed to inform container emptiers of their environmental and legal responsibilities with respect to the disposition of emptied packagings that previously contained hazardous materials. We are aware that some companies send such containers to scrap yards, which is not only an environmentally unsound practice, but one that could expose the company to Superfund liabilities or other legal claims.
What innovations are coming into the reconditioning business?
One of the most exciting technologies we have seen in recent years is the development of new, highly efficient ultrasonic leakproofness testing machinery. This technology appears to represent an improvement in efficiency over traditional leakproofness testing processes, the use of which both saves money for reconditioners and reduces to essentially zero the number of containers that exhibit problems in transportation. Several manufacturers and reconditioners have been authorized by DOT to use this technology, and the results are wonderful.
We are also seeing more efficient IBC cleaning machinery coming on-line all the time. Although such technologies are not sexy, they are more efficient and ensure that reconditioned IBCs look fantastic at the time of sale.
Lastly, we have seen several reconditioners deploy industrial robots on their processing lines. These robots perform relatively mundane tasks, like turning over an IBC on a cleaning line, but they are great labor-saving devices and eliminate injuries. I predict more of these robots will be used by reconditioners in the coming years.
To what extent is the reconditioning industry embracing a global approach to the business?
The reconditioning industry has had a global focus since the late 1960’s when the International Confederation of Container Reconditioners (ICCR) was formed. ICCR had its first international conference in Kyoto, Japan in 1970 and an international meeting has been held somewhere in the world every three-years since that time. The ICCR Board of Directors is composed of representatives from three association’s representing reconditioning companies in Japan, Europe and North America. Recently, we accepted a new member from China, and we are actively working with firms in India and elsewhere.
The fact is that empty industrial packagings are a global currency, and companies that empty drums and IBCs all over the world are pleased to know that a local reconditioner will take the emptied packaging and deal with it in a safe and environmentally beneficial manner. So, even though the industry is consolidating, the demand for reconditioning and reuse services is expanding. I like to say that reconditioners were the original environmentalists.
Our sincere thanks to Paul for taking part in the IP Interview