The returnable container: A beneficial concept in manufacturing? 

Table of contents: 

• Transport and packaging
• Why is packaging needed at all?
• Choosing between disposable and returnable containers
• How are empty containers used in a closed loop?
• What types of returnable containers exist?
• Reusable containers in manufacturing
• FAQs
• Takeaway
• Glossary

Transport and packaging

Except for ships, airplanes, buses, and trucks that are themselves means of transportation, few products travel unpacked. However, some specific products or materials are transported without conventional packaging. Most products require packaging during transportation, but a few exceptions exist due to their nature, size, or handling method. Bulk commodities such as grains, coal, sand, and ores are transported unpackaged in large quantities using bulk carriers, hopper railcars, or open trucks. Liquids, such as crude oil and chemicals, are transported in tankers or pipelines, while gases, including LNG and LPG, are transported in pressurised or refrigerated tanks. Natural raw materials like logs and timber often travel strapped on flatbed trucks or rail wagons without conventional packaging. Livestock is transported in specialised vehicles or ships with containment pens, avoiding packaging altogether. Automobiles and heavy machinery are usually shipped without crates, relying instead on minimal protective wrapping or film during their journey on car carriers or RORO vessels. Oversized infrastructure materials such as steel beams, wind turbine blades, and prefabricated concrete elements are moved on flatbeds or custom trailers without coverings. In agriculture, fresh produce may be loosely transported in bins or crates for short distances, particularly when delivered to local markets. Hay and straw bales also travel unpackaged, typically secured on open trucks. These examples highlight that unpackaged transport remains practical for certain goods due to their bulk, resilience, or logistical efficiency.

Some goods even require multiple layers that occupy a much greater volume than the product itself (e.g. microprocessors).

Summary table

Why is packaging needed at all?

Packaging plays a crucial role in the transportation and storage of manufactured products. It goes far beyond simply containing items—it protects, preserves, facilitates handling, and communicates vital information. Here's a detailed overview of why packaging is essential, especially for manufactured goods:

1. Protection Against Physical Damage

Packaging shields products from shocks, vibrations, pressure, electronic discharge, and impact during loading, transport, and unloading. This is particularly important for fragile items such as electronics, glassware, or machinery parts. Without protective packaging, goods are highly susceptible to breakage or deformation during transit.

2. Environmental Protection

Packaging acts as a barrier against environmental factors such as moisture, dust, sunlight, air, and temperature fluctuations. For example, food products need to be protected from humidity, corrosion and contamination, while electronics must be shielded from static electricity and dust.

3. Containment and Consolidation

Many products consist of small parts or units (e.g. screws, pills, components) that would be impractical to handle individually. Packaging helps group these items for easier handling, counting, and inventory control. It enables efficient storage and stacking during warehousing and transportation.

4. Preservation and Shelf Life Extension

Certain goods—especially perishables, chemicals, pharmaceuticals, and cosmetics—require packaging to maintain stability and extend usability. Barrier layers and sealed systems can prevent spoilage, oxidation, microbial growth, or evaporation.

5. Security and Tamper Evidence

Packaging offers a degree of security by deterring theft, unauthorised access, or tampering. Tamper-evident seals, RFID tags, or shrink wraps indicate if a product has been opened or altered, which is crucial for pharmaceuticals, electronics, or high-value items.

6. Ease of Handling and Transport

Proper packaging simplifies the physical movement of goods. Boxes with handles, stackable containers, pallets, or shrink-wrapped loads allow for mechanical handling (forklifts, cranes) and reduce loading/unloading time. It also optimises the use of transport space.

7. Information and Traceability

Labels and markings on packaging communicate essential information such as product specifications, handling instructions, safety warnings, expiration dates, batch numbers, and barcodes. This ensures correct usage, compliance with regulations, and traceability in the supply chain.

8. Branding and Marketing

Although not directly related to transport, branded packaging supports marketing and customer experience. Clear, attractive, and consistent packaging reinforces brand identity and builds trust with end-users, even in B2B contexts.

9. Legal and Regulatory Compliance

Many industries are legally required to use specific types of packaging or labeling. This includes hazardous materials (e.g. ADR-compliant containers), pharmaceuticals (child-resistant packaging), and food (hygienic and traceable systems). Non-compliance can lead to fines, product recalls, or reputational damage.

10. Cost Optimisation and Damage Reduction

Though packaging adds to logistics costs, it often reduces the total cost of damage claims, returns, and replacements. Well-designed packaging improves delivery reliability, which in turn supports customer satisfaction and operational efficiency.

Choosing between disposable and returnable containers

In manufacturing logistics, both disposable and returnable containers serve essential functions in moving goods efficiently through the supply chain. Each type has distinct advantages depending on the nature of the product, supply chain setup, and operational priorities. Understanding the benefits of both systems is key to optimising cost, sustainability, and handling efficiency.

Disposable Containers (Single-use)

Disposable containers—typically made of cardboard, plastic film, or lightweight wood—are designed for one-time use. They are most commonly used in outbound shipping, especially when returning packaging is impractical or too costly.

Key Benefits:

1. Low Initial Cost
2. Disposable containers are inexpensive to produce and acquire, making them suitable for small or infrequent shipments, or for companies with limited capital investment capacity.
3. Simplicity and Flexibility
4. These containers do not require tracking or reverse logistics. They reduce administrative complexity and are ideal for one-way shipping, third-party deliveries, or export shipments.
5. Lightweight and Space-saving
6. Disposable packaging is often collapsible or stackable before use, saving space in storage. Its lightweight nature also helps reduce transport costs.
7. Hygienic and Clean
8. Because they are new and used only once, disposable containers reduce risks of contamination or cross-contamination—important in sectors like food, pharmaceuticals, and medical devices.
9. No Return Logistics Required
10. There's no need to coordinate reverse flows, saving time, fuel, and emissions associated with retrieval routes.

Returnable Containers (Reusable/Return Logistics)

Returnable containers—typically made of durable plastic, metal, or composite materials—are designed for multiple cycles. They are widely used in closed-loop systems within industries like automotive, electronics, and large-scale manufacturing.

Key Benefits:

1. Long-term Cost Savings
2. While returnable containers have higher upfront costs, they offer lower total cost per use over time through reuse, especially in high-volume or regular supply routes.
3. Environmental Sustainability
4. Reusable containers reduce waste generation and reliance on single-use materials. Their longevity aligns with sustainability goals and can improve a company's environmental profile.
5. Durability and Protection
6. They offer superior protection against shock, moisture, and rough handling. This makes them ideal for sensitive or high-value components and precision parts.
7. Standardisation and Handling Efficiency
8. Reusable containers are often standardised in shape and size, which improves stacking, storage, and compatibility with automated systems, conveyors, or forklifts.
9. Integrated Tracking and Control
10. Many returnable systems include barcodes, RFID tags, or QR codes for container tracking, inventory management, and performance monitoring across the supply chain.
11. Improved Brand Perception
12. Reuse systems demonstrate environmental responsibility and operational maturity, which can enhance a manufacturer's reputation among partners and clients.

Both disposable and returnable containers offer distinct advantages. The choice depends on shipment frequency, return logistics feasibility, product type, cost considerations, and environmental goals. Many companies even use a hybrid approach, leveraging both types to match specific operational needs.

How are empty containers used in a closed loop?

The process of returning empties—such as returnable containers, pallets, or bins—follows a structured reverse logistics cycle designed to maintain efficiency and container integrity. It begins at the point of use, typically a manufacturing or assembly plant, where empty containers are collected after product unloading. These containers are then sorted by type, size, condition, and destination. Damaged or soiled items may be separated for repair or cleaning, while usable ones proceed to temporary storage areas within the facility.

Once a sufficient number of empties accumulate, they are prepared for transportation back to the origin plant or central packaging hub. This often involves palletising, stacking, or nesting to maximise space utilisation in trucks. Transport can be handled by in-house logistics teams or third-party providers, depending on the company's supply chain structure. Containers are typically returned along predefined loops, often coinciding with regular deliveries to reduce empty miles.

At the originating plant or packaging centre, the returned empties are received and undergo further inspection and cleaning. Automated or manual systems verify container condition and ensure they meet quality standards for reuse. Repaired or cleaned containers are then moved within the plant to storage zones, where they await refilling with new products or components.

Throughout the process, internal movement—via forklifts, conveyor systems, or automated guided vehicles (AGVs)—ensures containers reach the correct workstations or production lines. Many companies integrate tracking systems like RFID or barcoding to monitor container location and optimise usage rates, minimising loss and improving turnaround times.

What types of returnable containers exist?

Returnable containers come in many shapes and sizes to fill various needs. The typical types are:

1. Stackable containers
2. Nestable containers
3. Collapsible containers

Stackable containers

Stackable containers are the most commonly used in local supplier milk runs. They take up as much space empty as full, but that is not a problem in the absence of return freight opportunities from the customer back to the supplier. The containers' vertical walls enable them to hold multiple identical layers of parts, and the corresponding dunnage can remain in the empty returning container.

Nestable containers

Nestable containers occupy only a fraction of the volume they take up when full, but they cannot hold multiple identical layers of parts and the dunnage must either be disposed of or transported back to the supplier separately, which can nullify the space savings. Their stacking stability is also inferior to that of stackables, and they require lids. The main limitation of nestable containers is their tendency to ride up when bumping into each other on a conveyor.

Collapsible containers

Pallet-size wire baskets are collapsible containers and are used in many machine shops, but are often too large for the size of parts they contain. Smaller, collapsible containers are used for transporting (e.g. automobiles) parts across oceans. By collapsing to a fraction of their erected size, these totes enable their users to fill ocean-going containers with return freight, and they often establish trading companies to find such freight. The drawbacks are disallowing dunnage, requiring cautious skills, and their less robust and stable design.

Reusable containers in manufacturing

The containers used to transport parts between facilities are for the purpose of handling and protecting parts in transit, not to present parts appropriately to production operators at the customer site. On occasion, they may be usable for this purpose, but that is not common.

The first and most common problem is that transportation containers are too large for lineside use. One full pallet-size bin, as unloaded from the truck, may contain two weeks' worth of a part that goes into one out of ten products assembled on a given line. While other products are being assembled, their parts need the line side space taken up by the bin, which must, therefore, be removed, returned to stores as a partial, to be retrieved when needed later. Since parts are often just heaped into these bins, knowing how many are in a partial bin is practically impossible.

When there is no alternative to receiving parts in large bins, in-plant logistics must break them down for lineside delivery into bins that are small enough to remain in place until empty, ensuring that the parts' trip from the warehouse to the line is strictly one-way. A whole number of small bins decrements the content of the warehouse and never has to be adjusted back up for partials afterwards. This also results in saving about 60% of the floor space around the cell, using narrower aisles, and eliminating forklift traffic from the production area. The situation commonly arises in the early stages of converting to a lean production system, typically as a result of implementing cells (assembly process). Subsequent logistics improvements then allow the plant to migrate to a mixed-loaded cart system.

While breaking down large bins adds handling labour upfront, it is justified by the following benefits:

• Reduction in the amount of labour required later to handle partial bins.
• Simplification in information system requirements, by the elimination of return transactions for partials.
• Enhanced shop floor visibility. The flow of materials is easier to follow when it goes in only one direction.
• Improved inventory accuracy. The actual number of parts in partial bins is often inaccurately recorded (see also: barcode scanning system).

The second problem is part presentation. Parts should be presented to assemblers unpacked, within arm's reach, with their smallest dimensions facing out, and oriented for easy installation, with single-piece presentation and kitting as needed (assembly work). Transportation containers are designed to meet other needs, and, as a consequence, are frequently inadequate by the line side.

FAQ Returnable Container

What is a returnable container, and how is it used in manufacturing?

A returnable container is a durable packaging unit—such as a bin, tote, or pallet—designed for repeated use in a closed-loop logistics system. In manufacturing, it is used to transport components between suppliers, warehouses, and production sites. After delivery, the empty container is returned, cleaned, and reused, helping reduce waste and transportation costs.

What are the main benefits of using returnable containers over disposable packaging?

Returnable containers offer long-term cost efficiency, improved product protection, and environmental sustainability. Their standardised sizes enhance handling and storage efficiency, and their durability lowers the risk of damage during transit. Over time, they reduce packaging waste and dependency on single-use materials.

How does RFID technology support returnable container management?

RFID-enabled tracking systems allow companies to monitor the location and status of each container in real time (see also: automation of manufacturing process). This helps prevent losses, manage inventory levels, and optimise container reuse cycles. RFID software also reduces manual tracking errors, supports faster turnaround, and provides data insights to streamline supply chain operations.

Takeaway

A returnable container provides long-term cost savings, environmental benefits, and enhanced protection in manufacturing logistics, particularly when utilised in closed-loop systems. However, they must be carefully managed to avoid inefficiencies in storage, handling, and production line integration. To fully realise their potential, companies increasingly rely on asset tracking solutions using RFID software. These systems enable real-time visibility of container movements, reduce losses, and optimise container utilisation. By automating tracking and data capture, RFID software enables accurate inventory management, faster turnaround times, and informed decision-making across complex supply chains, transforming containers into traceable, high-value assets.

Delve deeper into one of our core topics: Real time locating system

Glossary

Automated Guided Vehicles (AGVs) are autonomous, computer-controlled vehicles used to transport materials within warehouses, factories, or distribution centres. They follow predefined paths using sensors, magnets, lasers, or vision systems and operate without human drivers. AGVs improve efficiency, reduce labour costs, and enhance safety in material handling processes. They are commonly integrated with warehouse management systems (WMS) or manufacturing execution systems (MES). (2)

References:

(1) M. Baudin & T. Netland (2023): Introduction to Manufacturing. An Industrial Engineering and Management Perspective. Routledge.

(2) Rooks, B. (2016). Industrial Automation: Hands-On. McGraw-Hill Education. ISBN: 9780071822995.

Note: 

This article was partly created with the assistance of artificial intelligence to support drafting. The head image was generated by AI.

Author

Mark Buzinkay, Head of Marketing

Mark Buzinkay holds a PhD in Virtual Anthropology, a Master in Business Administration (Telecommunications Mgmt), a Master of Science in Information Management and a Master of Arts in History, Sociology and Philosophy. Mark spent most of his professional career developing and creating business ideas - from a marketing, organisational and process point of view. He is fascinated by the digital transformation of industries, especially manufacturing and logistics. Mark writes mainly about Industry 4.0, maritime logistics, process and change management, innovations onshore and offshore, and the digital transformation in general. 

Find here a selection of his articles