Unpacking packaging
Building an effective packaging strategy: how the right moves can cut costs, ensure compliance and improve sustainability
In today's automotive market, with automakers from all around the world looking to reduce costs and meet targets for efficiency and environmental impact, innovation in the often overlooked field of packaging can deliver a significant competitive advantage.
Packaging might not be the first thought that comes into people's heads when broadly considering automotive logistics, but it is a crucial part of the supply chain; getting it right can lead to improvements in terms of cost, compliance and sustainability, while getting it wrong can lead to significant negative consequences.
Addressing the greatest challenges and opportunities presented by packaging in the automotive sector, three subject matter experts joined Automotive Logistics' managing editor Emily Uwemedimo to discuss all things packaging: Adam Wiley, packaging - strategic planning senior principal engineer at Honda Development & Manufacturing of America; Rob Newing, returnable packaging operations Leader at Cummins Inc.; and Arun Modgil, CEO, Ckdpack Packaging Inc.
Waste reduction and EU compliance
One of the biggest concerns in the automotive supply chain today – from a packaging perspective – is compliance with the EU's Packaging and Packaging Waste Regulation (PPWR). The regulation, which entered into force on February 11, 2025 aims to minimise unnecessary packaging and waste, fostering the transition to a circular, sustainable and competitive economy.
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By taking this action, the EU hopes to "make all packaging on the EU market recyclable in an economically viable way by 2030, safely increase the use of recycled plastics in packaging [and] decrease the use of virgin materials in packaging and put the sector on track to climate neutrality by 2050".
Newing at Cummins Inc. explained that "making sure now that the packaging we have does contain the minimum 35% recycled content, which is increasing to 65% by 2040" is a crucial consideration for the company. But he noted that there's more to consider than this alone, saying that sustainable packaging also means "improving the efficiency and fill rate on trucks and how we use packaging... so it's about the driving optimisation as well".
Despite entering into force earlier this year, the general application date of PPWR provisions is set as 12 August, 2026, when it will replace the existing Packaging and Packaging Waste Directive (PPWD).
Returnable packaging
Switching from expendable to returnable packaging is one strategy that many companies are considering as a means of reducing waste, cutting costs and improving sustainability.
Explaining his order of priority when it comes to the benefits driven by returnable packaging, Newing notes that environmental and safety issues come before cost concerns. "I put cost last because... if you get your safety right first, get your quality right, get your process right... the cost will take care of itself," he shared.
He identified six key elements for effective returnable packaging operations: pooled packaging; tracking; inventory control; container management centres; planning; and implementation.
Newing also touched on the need for future-proofing, and claimed that "underpinning all of this is digitalisation". He emphasised the benefits of maintaining visibility through track and trace to understand where packaging is and avoid losing reusable containers.
Furthermore, he acknowledged that when embarking on a transformative journey in terms of packaging, particularly when starting out, measuring performance and keeping track on metrics can be instrumental in driving improvements. "Not only are we rolling this out, we're also looking at ourselves to make sure we can continually improve and enhance what we've got out there," he said.
On the topic of returnable packaging, Ckdpack's Modgil shared how, from his experience working with OEMs, one of the biggest challenges he's come across is convincing the company's OEM customers of "returnable packaging being cost effective and implementable across oceans [and] across the world".
He also backed up Newing's point on the importance of increasing the fill rate of trucks to ensure packaging and freight solutions are truly as sustainable as possible. "The biggest challenge we face is that a lot of customers buy the cheapest packaging, they buy the cheapest freight, they buy the cheapest trucking and container rates, but not all the packaging is filled up to the efficient level that it needs to be, and then not all the containers and trucks are filled up to the level that they could be," he said.
Packaging across the pond
Newing acknowledged that there are some key differences when looking at packaging in Europe, the Middle East and Africa when compared with North America, not least the much larger number of countries and languages encompassed by the EMEA title. "It's about 20 different countries, 18 different languages, [different] customs declarations. and stuff like that we have to consider," he explained.
From a North American logistics perspective, the speakers discussed that regulatory framework involves coordination primarily across the US, Canada and Mexico, and how agreements such as USMCA have helped streamline cross-border movement of parts and returnable packaging, contributing to operational consistency.
They also noted that regulatory drivers for packaging and material sustainability vary by region. In North America, current guidelines allow for a degree of flexibility in packaging design and reuse strategies, which can support operational efficiency. In contrast, European markets may be more influenced by evolving sustainability mandates.
Standardisation in packaging
Speaking on the topic of standardising packaging, Newing described it as "critical". He emphasised the value of "getting it right the first time", by working with a supplier to properly consider the weight, dimensions and volume consumption of a part and aligning packaging with the requirements of the supply chain.
He noted that adherence to that process is important. "If you don't have boundaries and rules, then you have chaos," he said. But at the same time, he noted that firms must be open to listen and investigate any issues, collaborating with key partners to create a solution that works well for all.
"I think on its surface standardisation is critical for a returnable packaging fleet and the management of it," Wiley added. "You need to be able to have some planned consistency. Not everything's going to fit in a one-size-fits-all pack [and] if you do, then you're obviously not being efficient enough with your design and your supply chain."
For firms experiencing this issue, he recommended introducing some variety such as larger containers and modular containers to establish a "library" over time.
"When you have a returnable packaging fleet, having the standards helps the overall operational plan be successful," Wiley stated, also acknowledging how data can be valuable in optimising packaging and supply chain operations from both a cost and efficiency standpoint.
"If we have the standardisation, that helps drive simplicity, so we have reliability and efficiency and scalability," Wiley concluded.
Availability of packaging
A common issue in the sector is packaging not always being available where it's needed, and that can cause downtime – something that is incredibly costly to businesses in this industry. Modgil shared an anecdote to demonstrate how Ckdpack has supported customers to mitigate these risks in a returnable packaging network.
"About seven or eight years ago, [with] one of our customers we were supplying returnable packaging to, we saw that based on the products that they were shipping in our packaging they were buying too much packaging," he said. Modgil acknowledged that while telling the customer this could seem counter intuitive for the business, they felt it was the right thing to do.
He explained how Ckdpack developed its own tracking system for those shipments and presented the customer with the data to show that packaging was being misplaced or not used properly. "In the last eight years, we have developed our own systems to do this and the best part is we are not asking our customers to invest in returnable packaging anymore," he said.
Modgil elaborated, claiming that by charging customers on a per-component basis, Ckdpack has been able to "remove the fear of capital asset purchasing approvals from returnable packaging".
The future of returnable packaging
Each of the subject matter experts shared what most excites them about the future of returnable packaging. "Creating that real-time supply chain visibility, coupled with the packaging as well is a real game changer," Ewing said. "so seeing that technology come through in the next five years, we'll be talking about this again in a much different light."
"When we talk about automation, packaging becomes a conduit between a supplier and a manufacturing location where you don't want people to be able to touch parts, you just want it to flow seamlessly," noted Wiley. "So that is a huge challenge for us right now, but it's also something that's super exciting where we can see packaging integrated into the overall supply chain and manufacturing system across the board, due to the automation that's going to happen in the future."
Finally, Modgil presented his outlook. "Manufacturing technology is improving dramatically [and] we can use much more complex manufacturing processes to make the packaging a lot more efficient and also to standardise a lot of products that we can manufacture on the same equipment – so that is driving the cost down for a lot of complex packaging nowadays," he said.
Modgil advised that anyone scared that shipping parts across longer distances using returnable packaging can't be cost effective look through the business cases that prove otherwise, and added that "with the robotics and automation coming onto the production lines, packaging is becoming a lot more sophisticated".
