Tell it to The Packer | Letter to the Editor
Vice president of global marketing
IFCO Systems, Tampa, Fla.
The Corrugated Packaging Alliance’s recently published “strawberry case study” (The Packer, Jan. 27, Page B6) joins other such studies distributed by the Alliance based on the group’s Full Disclosure cost modeling tool.
Unfortunately, the tool’s methodology reflects a lack of understanding of the modern fresh produce supply chain, misrepresenting the impacts of produce packaging as experienced by growers and retailers familiar with the RPC system.
Here are a few points to help clarify these mistakes:
- Transportation efficiency — The CPA analysis shows that RPCs have additional transportation costs when the RPC pack for strawberries fits 9 clamshells compared to the 8 in the typical cardboard box.
- Labels — The CPA analysis assumes that growers do not use labels on cardboard packaging. In fact, growers must use labels for both packaging types in order to be PTI-compliant.
- Handling costs — The CPA analysis includes costs of RPC backhaul and washing, which are never the responsibility of either the grower or retailer. However, if the CPA wished to include these costs for a theoretical impact analysis, they must also include the costs of hauling baled cardboard to the recycling center as well as the costs for recycling and remanufacture of boxes.
- Operating impacts — The CPA analysis shows no operating impacts for either system, when in fact RPCs significantly reduce shrink and labor/handling costs at the distribution center and store level.
- Amortization/inventory value — The CPA analysis includes the amortization expense for RPCs, which has no bearing on the grower or retailer.
The world’s leading grocery retailers continue to convert cardboard packaging to RPCs for fresh produce shipments because they realize the supply chain-wide cost and waste reductions as well as quality improvements. Does the CPA expect us to believe that the highest performing retailers in North America and the world have invested time and effort into increasing their supply chain costs?
In fact, even the cardboard industry knows that RPCs reduce supply chain costs. In a recent article in Pulp & Paper International Magazine, World Containerboard Organization president and chief executive officer Mike Harwood admitted “The (Fibre Box Association) says it can prove that corrugated is less costly than RPCs in a complete cycle … the corrugated box, one-time made, on-time delivered, is less expensive. But it’s really not.”
Even if one limits one’s view to only the grower’s packaging purchase or rental cost, RPC price stability is a key advantage versus the price variability (always increasing) in corrugate boxes. Grower/packers using RPCs welcome stability as they increasingly must commit to longer term pricing for the retailers they serve.
In summary, the market trend across the globe is increasingly towards RPC in the fresh produce supply chain.
Retailers and growers who use the RPC system daily know the reality of the value it brings, not only from greater efficiency and cost reductions, but lower environmental impact and the delivery of higher quality produce to consumers.
Nothing produced by the CPA has ever been able to counter that fact, including the cited case study.