Corrugated Alliance challenges RPCs on grape costs

06/01/2004 12:00:00 AM
Terry Scruton

(June 1) INDIANAPOLIS — First it was apples, then citrus products, now grapes.

The Corrugated Packaging Alliance has released the third in its ongoing series of cost-comparison studies examining the use of the corrugated common footprint compared to reusable plastic containers.

The result, according to the study, is a savings of more than 10% on overall supply chain costs by using corrugated packaging.

The study, which was conducted by Heads Up Systems Inc., West Linn, Ore., used information gathered from an unnamed California grape grower using Full Disclosure, an activity-based, cost-modeling tool that evaluated the total annual costs for shipping 1.5 million 19-pound cartons of grapes over a distance of 2,800 miles.

The study found that the company in question spent $5.4 million using corrugated common footprint containers along the supply chain vs. $6.9 million using RPCs.

RETRIEVAL COST

Some California shippers agree with that assessment.

Chuck Olsen, managing partner in Chuck Olsen Co., Visalia, Calif., said that he uses corrugated on a more regular basis because it is more convenient and costs less than RPCs.

“I have a real problem with RPCs in that, say, for instance you have a rejection for some reason or another and you have to take (the grapes) to a wholesaler,” he said. “The retrieval cost is tremendous.”

CORRUGATED PROBLEMS

Other shippers, however, say corrugated has problems of its own.

Chris Caratan of Columbine Vineyards, Delano, Calif., said that about half of the state’s grape crop is shipped in expandable polystyrene (EPS) containers.

Caratan said Columbine ships all of its product in EPS containers.

“The corrugated has its place in the industry, if it’s a pack-and-ship situation where the grapes are not going to be spending any time in cold storage,” he said. “But if the grapes are going to be held in cold storage for any length of time, I think the EPS is a better choice.”

Caratan said corrugated tends to absorb moisture from the fruit as well as absorbing sulfur dioxide, which is used for fumigation purposes, meaning that more sulfur dioxide must be used to make up the difference.

David Russell, president of IFCO Systems NA, Tampa, Fla., and vice president of the Washington, D.C.-based Reusable Pallet and Container Coalition, said that, while he could not comment on the validity of the study’s results, RPCs are being used by grape shippers.

“I will say that RPCs are widely utilized and accepted in the grape category,” he said. “We believe this is a continuing indication of the many benefits RPCs provide to the growers, packers and the retailers in the produce supply chain.”

A MIX

The Corrugated Packaging Alliance has been conducting packaging studies on a commodity-by-commodity basis as part of its strategy following a study commissioned by the alliance in mid-2003.

That study, conducted by Willard Bishop Consulting Ltd., Barrington, Ill., found that, while retailers are predicting an increase in the use of corrugated packaging, they are not planning to abandon RPCs altogether.

Instead, the study found that retailers will use a mix of corrugated and plastic to ship their products, depending on which container best suits the commodity.

For more information, visit the alliance Web site at www.corrugated.org.



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