Logistics driven packaging for efficient and sustainable road freight : A case study on a global export company

Abstract: Packaging plays a crucial role in logistics as it has a significant effect on the efficiency of transportation. The shape and dimensions of packaging material has considerable impact on transport performance, whereas an optimal packaging system for products enables for improved utilization of the total volume on a load carrier. As a result of improved freight performance, transportation costs can be reduced. Improved vehicle utilization for shipments also has a positive impact on environmental aspects, as increased vehicle fill rate can lead to less required transports which ultimately lowers the overall carbon emissions caused by transports. Therefore, an optimization of the packaging model can lead to substantial benefits, both economically and environmentally. The purpose of this study was to create a cost estimation model for the company Machine Corporation that would illustrate what effects a new packaging strategy would have on transportation costs, fill rate and environmental aspects. To achieve this purpose, relevant data have been collected from the company together with suitable metrics found in the literature. The collected data was thereafter used to create a cost estimation model that served as a tool to determine the total costs and the potential savings. The outcome results of the model showed that Machine Corp. would have made a yearly saving of 2 341 353 SEK. The implementation of a new packaging strategy was estimated to increase the volume-based fill rate for truck loads by approximately 54% which enabled for a reduction of transportation costs by 32%. Furthermore, the results showed a positive impact on environmental aspects as the total amount of road freight shipments needed per year was estimated to reduce by 32% as well and the total tonnes-km per year would decrease by 31%.