Rising e-commerce costs to change logistical packaging, new research reveals

February 05, 2019

As e-commerce continues to dominate the retail arena, new research has revealed that UK logistics firms are facing an unprecedented rise in operational costs over the next two years, which is set to have a knock-on effect on their packaging needs.

According to a new survey1 by Antalis, 21% of logistics firms revealed that the main operational challenge for their business over the next 1-2 years will be snowballing costs due to the growth of online shopping.

Interestingly, a third of respondents – including businesses that operate up to 3,200 distribution sites across the UK – said that as a result, a greater number of firms are now looking to improve their packaging recycling rates as well as adopting more eco-friendly packaging.

Added to this, 20% of those polled said they are interested in smarter packaging to improve sustainability, reducing the level of plastics in their packaging and improving their customer experience. Another focus area, said 17% of respondents, is preventing the rising level of damages associated with online purchases, which was cited as a key concern for the year ahead.

  • More than a fifth of logistics firms say dominance of online shopping will increase operational costs over the next two years
  • More than half admitted changing packaging in the last 12 months has benefitted their business

Andrew Smedley, head of e-commerce and logistical packaging at Antalis Packaging, said: “With latest figures showing that 20p in every pound is now spent online1, it’s unsurprising that many logistics firms are struggling to deal with the mounting costs associated with the packing, processing, and delivery of a record number packages to UK homes. To keep these costs down, many will be looking at ways to optimise existing processes and drive efficiency in the supply chain and packaging is often a great place to start.

“From our research, we’re seeing a discernible shift towards more environmentally friendly business decisions, including a greater number of firms that are actively taking steps to recycle up to 80% of their packaging by 2020 and 100% by 2022. As such, this will no doubt drive investment in not only eco-friendly but also smarter packaging solutions aimed at cutting out excess materials and improving protection from damage.”

With many already investing in new packaging, 76% of logistics firms revealed that they had changed the packaging of one or more of their products in the last 12 months, acknowledging that adapting their packaging strategy in-line with the developing market has proved beneficial to their business. Supplier issues, rising costs and damage/loss of product were named as the most common reasons behind a change in packaging, as half of the firms surveyed said the move had led to improvements and significant cost reductions.

Andrew adds: “The logistical environment is fast-evolving and competitive and increasingly every resource and square footage used has to demonstrate good value for money. It’s no different for packaging and it’s heartening to see that firms are reaping the rewards of adapting their packaging to meet market conditions and achieving significant cost savings as a result.”

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