CASE STUDY No. 9602
KEY WORDS= REUSABLE CONTAINERS, STYROFOAM SHIPPERS, COOLERS
Bayer Corporation
605 Laurel Street
Mishawaka, IN 46544
Contact: William B. Myers, Mgr. Distribution. Tel: 219-262-7068.
Summary
By making it easy for customers to return an expanded polystyrene (EPS) shipping container for reuse, the company diverts a large volume of EPS from disposal and cuts shipping costs.
Action
Bayer Corporation ships certain perishable products to customers in an expanded polystyrene container with inside dimensions of 10 x 9 x 12 in. (0.625 cu. ft. of inside space). The container comes with a molded EPS lid with the Bayer logo embossed; three reusable ice packs are included. Walls of the EPS container are 1-1/2 in. thick, and outside dimensions are 13 x 12 x 15 in. Thus, total volume of EPS is approximately 0.922 cubic feet. The EPS container (manufactured by Polyfoam Packers Corp., Wheeling, IL. 800-227-8865) fits inside a single-wall corrugated carton designed to withstand an edge crush test (ECT) of 32 lbs./in.
Bayer makes approximately 14,000 shipments per year in the kind of container described above. Before 1994, the company did not have a recovery program for these containers. Out of concern for the environment, including the volume of EPS disposed in landfills, the company formed a task force to design a system for recovering and reusing these polyfoam shippers. The five-member group included representatives of the purchasing, warehousing/logistics, office services, traffic, and safety/training departments. They set a goal of breaking even in cost while reducing the disposal rate of its EPS containers.
The solution was to develop a reuse "kit"--actually, a No. 10 envelope imprinted "Recycling Kit--Please Open"--which is placed atop contents of the EPS container, just under the lid. The envelop contains a brief letter to the customer explaining Bayer's concern for the environment and how the return-program works. The envelope also contains a United Parcel Service "UPS Authorized Return Service" label, pre-addressed to the Bayer distribution center. The label is printed by UPS and furnished to Bayer at no charge. When the EPS container is emptied of contents, the customer simply closes and seals it and affixes the pressure-sensitive label. UPS delivers the empty back to Bayer at Bayer's expense. The letter to customers suggests they reuse packaging "peanuts" (95% corn starch) if any are included; reuse the ice packs or return them to Bayer; and recycle (not return) the EPS container if it has become contaminated during shipment.
Payback
Bayer inaugurated the new program on October 24, 1994, and kept track of the return rate. Through April 1995, overall returns to five company distribution centers throughout the U.S. equaled 28.9% of shipments--about what the task force had originally projected. Few returned containers are unusable; most can be used for three round-trips before they show wear and are recycled (through the Association of Foam Packaging Recyclers national program: 800-944-8448). Since there was no change in the container, simply the establishment of a system of retrieval, the out-of-pocket cost to Bayer was minimal.
Payback in terms of cost was immediate but comparatively small: each time an EPS
container is reused, Bayer saves about 89% of the cost of a new container (the difference
between the $3.50 UPS charge for return freight and the $3.13 cost of a new EPS
container). More important than reductions in shipping cost are the reductions in
landfilling and the enhanced customer goodwill that this program has generated for Bayer.