TOPIC 3

Packaging and Containerisation

STADIO | LOG100/LOGD152 | Study Notes

🧠 MEMORY TRICK – Topic 3 Big Picture

This topic has THREE main parts:
PART A: PACKAGING (Sections 3.1 – 3.3) — what it is, its functions & logistics role
PART B: DEVELOPING PACKAGING SOLUTIONS (Sections 3.4 – 3.4.7) — design, materials & trade-
offs
PART C: CONTAINERISATION & TECHNOLOGY (Sections 3.5 – 3.7) — ISO containers, RFID,
barcodes
Memory phrase for 3 Packaging Layers: "Pretty Suits Uphold" = Primary, Secondary, Unit load /
Distribution

PART A: PACKAGING

3.1 Introduction
Packaging has been associated with humanity since the earliest times — from natural materials like reed
baskets and pottery containers, to today's complex multi-layer solutions. Modern packaging is critical for
manufacturers, distributors, and consumers alike, adding efficiency to the supply chain and contributing to
the effectiveness of warehouses and transportation.
Containerisation plays a similar role but makes a much bigger contribution to efficiency and effectiveness
in the supply chain — especially in intermodal and international transportation.

In this topic, you will learn:

• The logistics functions and benefits of packaging
• The cost and service trade-offs involved with packaging in logistics
• Factors involved in the development of packaging solutions
• Similarities and differences between standard containers and unit load devices
• Ways in which technology can be integrated with packaging and the benefits thereof

3.2 Definitions and Functions of Packaging

3.2.2 Definition of Packaging

Packaging constitutes all the activities of designing and producing the container for a product.
Often considered an essential marketing subset, packaging forms the core distribution, storage, and sales tool
that can be a part of the product itself or an external container. The seller uses it to distribute, store, and
promote; the customer uses it as an important identification and usage tool.

3.2.3 Functions of Packaging

The nature of the product (liquid, solid, corrosive, perishable) and the form it comes in directly influence
packaging design. Key considerations include:
• Containment: Products must be contained for transportation, storage, or consumption
 • Protection: Against vibrations, shocks, abrasion, deformation, changes in temperature, humidity,
and tampering
• Communication: Must convey relevant/legal information to the consumer (ingredients, nutritional
info, age limits, contact details)
• Unitisation: Bundling products into larger units (e.g. pallets with multiple cartons) to reduce handling
times and damage
• Promotion/Aesthetics: Attractive packaging helps the product stand out and appeal to customers
• Convenience: Makes it easy for the customer to carry, transport, and use the product
• Sustainability: Enhancing brand appeal while maintaining environmental responsibility

⚠ Protection vs Preservation: Protection = prevention of physical damage. Preservation = inhibition of

chemical/biological changes. Know the difference!

3.2.3 The Layers of Packaging

Layer Description Example

Primary packaging First layer — directly contains and protects the Foil bag containing biscuits
product

Secondary packaging Second layer — contains the primary packaging Carton holding 50 bags of biscuits

Unit load Numerous distribution packages unitised for Pallet loaded with 2 cartons of
efficient handling, storage, and shipping biscuits

Distribution packaging Protects the product when distributed and helps Box containing an external door
efficient handling panel for a light motor vehicle

🧠 MEMORY TRICK – 4 Layers: "Pretty Suits Underpin Delivery" = Primary, Secondary, Unit Load,
Distribution

3.2.4 Benefits of Packaging

Benefit Explanation

Distribution Good packaging lets sellers transport products from manufacturing unit to the final
selling point

Storage Proper packaging helps the seller store and assort products, reducing risk of spoilage
and mishandling

Promotion Packaging is a vital marketing element — attractive, colourful packages inform buyers
about features and benefits

Safety Good packaging aids product safety before it reaches the final consumer (e.g. Tetra
Pak prevents milk spoilage)

The 5 Functions of Packaging Include:

• Contains the product during transportation, storage, or consumption
• Protects the product from damage and contamination
• Aids product handling and makes it easy to transport and ship
• Differentiates the product and makes it stand out from other products
• Forms a part of the product marketing strategy — promotes sales

3.3 The Role of Packaging in Logistics

Packaging is important in the context of a logistics system. The main areas where packaging impacts the
supply chain are warehousing, materials handling, and transport.

3.3.1 Warehousing and Materials Handling

Packaging is important in terms of properly utilising space and associated costs. When packaging is damaged,
this leads to many additional costs and could negatively impact customer service. Warehousing managers
must always think about how packaging of goods affects the stacking of products.

3.3.2 Transport
There are many transport options available, each with own specific hazards and constraints. The trend towards
multi-modal transportation is making this increasingly complex. Specific issues and challenges relate to air,
road, rail, and ocean cargo.

3.3.3 Packaging and Logistics Trade-offs

Packaging has a direct impact on cost as well as customer service. Issues to consider include:
• Packaging design
• Type of materials used
• Kind of information it needs to contain
• Impact on efficiency and effectiveness of all related logistics activities

📌 KEY TRADE-OFF EXAMPLE: In inventory management, while packaging contributes to lower theft
levels of the product, it may also increase the value of the product and contribute to carrying costs.

PART B: DEVELOPING PACKAGING SOLUTIONS

3.4 Developing Packaging Solutions

When a company identifies the need to develop a packaging solution, there are two categories to consider:
• Consumer packaging — designed for individual customers; extends to packaging/wrapping the
consumer gets a product in. Goes from manufacturer to retail store to consumer. Known as bespoke
packaging.
• Industrial packaging — used to deliver goods from manufacturer to retailer; stores, protects, and
holds large quantities of a single product; usually robust and heavy-duty.

3.4.1 Factors Influencing Packaging Design

A systems approach is recommended — considering the product, manufacturing, warehousing, distribution,
retailing, and the end-user from the beginning. Key considerations:
• The requirement of the end-user (what kind of packaging is needed to contain it?)
• How susceptible the product is to damage
• Optimising the area used during storage and the space during transportation
• A good packaging design must be functional, durable, and attractive

3.4.2 Packaging Materials

There are 5 basic types of packaging material, each with specific properties:
Material Key Properties

Glass Highest level of clarity; good gas and liquid barrier; recyclable and reusable; more fragile than
other materials; superior for liquids/gases that may corrode plastic
 Paper Very versatile; reused and recycled; includes carton board, liner board, bags, sacks, corrugated
cardboard; cheap, strong, printable

Plastics Versatile and lightweight; 60+ categories of plastic or resin; can be transformed into many
shapes; all recyclable

Metal Good gas and liquid barrier; strong and quite flexible; expensive; commonly used as primary
packaging for food (NOT secondary)

Wood Strong and rigid; used for custom-made packaging; regulations govern import of wood
packaging into different countries — less appealing

🧠 MEMORY TRICK – 5 Materials: "Great Pandas Play More Wildly" = Glass, Paper, Plastics, Metal,
Wood

3.4.3 Palletisation
Pallets are flat and rectangular structures onto which smaller units of a product can be stacked for transporting
and storing products in a stable manner by using mechanical means. Pallets are usually made of wood, though
metal, plastic, or corrugated cardboard examples exist.

2 Broad Categories Several Options Also Include

Block pallets Reversible pallets

Stringer-type pallets Wing pallets

Two-way-entry pallets

Four-way-entry pallets

📌 KEY CONSIDERATION: A big issue with pallets is whether they are returnable or not. Returnable
pallets are deemed more cost-effective. Pallets must be designed to carry the maximum load AND be as
strong as possible.

3.4.4 Bulk Packaging Systems

Bulk packaging (also called industrial packaging) handles large quantities of chemicals, liquids, powders,
grains, rice, and other food items. It only needs to meet ONE requirement: to survive storage and
transportation.
Container Type Used For / Properties

Bags (various laminations/films) Dry products and sugar products; stronger rubberised films for some

Metal drums High tare weight; expensive; versatile; reusable; recyclable; can handle
environmental challenges

Rigid plastic containers Often collapsible; light; extremely resistant to any shipping environment

Wood bulk containers Reusable; disposable; light tare weight; durable; can resist shipping
environments

Factors to Consider When Planning a Bulk Packaging System:

Product Requirements:
• Atmospheric and physical protection
• Loading and unloading
• Compatibility with packaging material
• Retention gases, emission of vapours
• Production volumes, storage methods, shipping quantities
Cost Factors:
• Product weight and volume (influences material type)
• Container cost — physical cost of container itself, plus freight and storage costs
• Container type — what markets will be served, distribution challenges, customer requirements

3.4.5 Cost Trade-offs

In today's competitive business environment, companies must consider ALL costs that contribute to the overall
cost of packaging:
• The cost of getting the packaging to the point in the supply chain where the product is placed into it
• The cost of filling the packaging
• The cost of handling the filled package
• Storage and distribution costs
• Packaging will also influence the sale of the product itself

⚠ Companies must consider the trade-off between total cost of packaging against an increase in sales
and savings in costs down the rest of the supply chain. A not-so-strong primary package can be
manufactured at relatively low cost, but expensive distribution packaging will then be needed!

3.4.6 Legislative Challenges

There are major differences between countries regarding legislation governing the use of packaging.
Generally, legislation requires the manufacturer and/or retailer of a product to state what is inside the package.
Food containers must state ingredients, and consumers should be given contact details.

📌 SA EXAMPLE: Woolworths strictly adheres to the Foodstuffs, Cosmetics and Disinfectants Act —
providing detailed labelling on ALL food packaging including full ingredient lists, allergens, nutritional info
per 100g, batch codes for traceability, and customer service contact details.

3.4.7 Environmental Concerns

Packaging should not only protect the product and provide information — there is growing pressure for it to be
more environmentally friendly. Businesses now need to consider:
• Possible negative environmental effects packaging may have
• Life-cycle assessment (LCA) — determines the potential environmental effects of packaging
• Recycling and reuse of packaging materials
• Environmental concerns at the design stage — not as an afterthought

📝 SA CONTEXT: South Africa implemented plastic bag legislation to reduce litter from plastic shopping
bags — a real example of how environmental legislation affects packaging decisions.

PART C: CONTAINERISATION & TECHNOLOGY

3.5 Containerisation
Containers are box-like structures that make it possible for shippers to consolidate several items into a
single freight unit — loaded onto container ships, railcars, trucks, and planes. Containerisation refers to the
system by which containerised freight is transported intermodally.
Benefits include: improvements in handling efficiency, moving multiple items as a single unit, savings in
handling/storage costs, increasing the flow of goods through freight terminals, and a reduction in reported
damage to freight.
3.5.1 ISO Containers
In terms of ISO standard, there are 5 different lengths of containers:
ISO Length Status

20 ft Most commonly used

40 ft Most commonly used

45 ft Less common

48 ft Less common

53 ft Less common

📌 Most used: 20 ft and 40 ft containers. While outside dimensions are standardised, there can be
variation in internal dimensions — always confirm true internal dimensions when planning a container
load.

Types of Freight Containers:

Container Type Description

Standard containers General-purpose, most common type

High-cube containers Extra height — 9.5 ft instead of standard 8.5 ft

Hard-top containers Removable roof for top-loading cargo

Open-top containers No rigid roof — for oversized cargo

Flatracks Collapsible sides — for heavy or wide cargo

Platforms (flat) No walls or roof — for heavy/bulky items

Ventilated containers Allows air circulation — for agricultural products

Insulated and refrigerated containers Temperature-controlled — for perishables

Bulk containers For dry bulk cargo like grain

Tank containers For liquid cargo

3.5.2 Smart Containers

A smart container is a type of container that utilises technology to sense when specific changes occur and
can report these changes to pre-identified parties via Radio Frequency Identification (RFID), satellite, or
cellular technology.

Main Requirements for Smart Containers:

• Detect any breach through any part of the container
• Sense the internal environment of the container
• Sense the presence of cargo that has the potential to be hazardous or illegal
• Communicate their location to those responsible for its content

Challenges to Widespread Adoption:

• Non-standardised or uniform global RFID frequencies and standards
• Infrastructure needed to provide for satellite communications
• Different cellular protocols worldwide, as well as issues around cellular security

Benefits of Smart Containers:

 Benefit Explanation

Improved Transparency Provides real-time data on location, condition, and status of goods — enhancing
supply chain transparency

Enhanced Security IoT technology and sensors ensure goods are protected from theft and tampering

Reduced Waste Precise environmental control means perishable goods like food and
pharmaceuticals are less likely to spoil

Increased Efficiency Optimising routes and reducing downtime improves transportation efficiency,
lowering operational costs

Regulatory Compliance Monitoring and recording conditions helps industries better adhere to strict
regulatory requirements

Positive Environmental Impact Reduces carbon footprint, minimises food/product waste, improves energy
efficiency, lowers environmental risks

3.6 Using Technology with Packaging and Containerisation

3.6.1 Bar Codes

Barcodes are stripes of varying widths printed on products and packages, representing data by varying the
spacing and width of parallel lines. They are a key technology in logistics, critical for managing inventory,
tracking shipments, and ensuring the accuracy of deliveries.

Scanner Type How It Works Best Used For

Laser-based scanners Uses a laser beam to read barcodes by Retail environments; quick scanning
reflecting light off black and white bars; single of linear barcodes
line of laser light sweeps across the barcode

Image-based scanners Captures image of entire barcode using built-in QR codes; damaged/poorly printed
camera/imaging sensor; algorithms decipher barcodes; more versatile
barcode data

Modern Applications of Barcodes, QR Codes & Mobile Scanners:

• Inventory management: Scanning barcodes with automated devices enables real-time inventory
updates, reduces human error — especially crucial for JIT inventory systems
• Shipment tracking: Scannable codes provide live updates as goods move through the supply chain
— enhancing transparency and accountability
• Sorting and routing: Automated sorting systems use barcodes and QR codes to direct packages
through distribution centres, improving speed and reliability

3.6.2 Radio Frequency Identification (RFID)

RFID technology has existed for many years and provides logistics managers with multiple ways to track
and manage products and assets in the supply chain, with applications ranging from inventory management
to automation.

How a Basic RFID System Works:

Component Function

RFID Tag Attached to assets; transmits stored data to the antenna

Antenna Receives stored data from the tag and transmits it to the RFID reader

RFID Reader Connected to the antenna wirelessly; receives data from the RFID tag

Computer Database Data is transmitted into the RFID database where it can be stored and evaluated
10 Benefits RFID Can Bring to the Supply Chain:
Benefit Explanation

1. Improves product tracking through WMS WMS stores data on inventory levels, product locations, and reordering
integration details. Integrating RFID with WMS makes product tracking faster,
easier, and more accurate.

2. Improves product handling efficiency RFID can help with route planning and goods handling within and
between supply chain locations. Equipment tags allow workers to know
the location of logistics assets at all times.

3. Increases inventory counting speed RFID tags and scanners speed up inventory counting and reconciliation
— some scanners can count all tags in a particular location
simultaneously.

4. Helps fix incorrect inventory counts Makes it easier to identify the source of issues with receiving, storing or
distributing products. If an item is in the wrong location, an RFID
scanner can identify the tag elsewhere and alert the user.

5. Helps improve product availability Combining consumer demand info with RFID tracking helps suppliers
ensure products are in stock when needed. Groups can match number
of products in a location with expected sales levels.

6. Helps automate product receipt, storage Today's warehouses use automation. Product tags enable automated
and distribution technology to select ideal package types and enable robots to handle
and route products.

7. Helps optimise the manufacturing RFID can help lower manufacturing costs and increase speed.
process Suppliers can use RFID to track raw materials and parts in their
facilities.

8. Improves product tracking, safety and RFID makes it easier to track products and recall faulty ones.
recalls Manufacturers can add batch numbers, lot numbers and manufacturing
dates to RFID tags.

9. Reduces product theft RFID keeps track of inventory location and issues an alert if a product
leaves an authorised area, reducing the possibility of product theft.

10. Improves compliance and regulatory RFID tags monitor and log how products are stored and moved; can
reporting raise an alert if regulatory rules are breached.

3.6.3 Multi-technology Integration

Technological integration in logistics management is becoming increasingly important. Logistics management
involves the planning and coordination of the movement of goods and services from one point to another, and
technology plays a major role in enabling this.
Benefits of integrating different systems with technology include: improved communication, improved
customer service, better visibility of goods, and more efficient operations. When logistics management
software is integrated with CRM software, it allows companies to offer better customer service — customers
can track their shipment online and receive real-time notifications.

3.7 A Supply Chain Perspective on Packaging

There is a growing tendency for companies to start managing packaging as an interdependent component
of an integrated system comprising various stakeholders throughout the complete supply chain.
• Lack of conformity between parties is a main challenge — addressed by improved communication
and collaboration
• Companies are challenged by increased environmental restrictions and the need to use
environmentally friendly packages throughout the entire supply chain
• Packaging has a direct influence on other elements of the supply chain, including total logistics
costs and customer service levels
 ⚡ QUICK RECALL SUMMARY – TOPIC 3

PACKAGING – Must Know:

• Definition: All activities of designing and producing the container for a product
• 4 Layers: Primary, Secondary, Unit Load, Distribution packaging
• 5 Functions: Containment, Protection, Communication, Unitisation, Promotion
• 5 Benefits: Distribution, Storage, Promotion, Safety, Marketing
• 3 Logistics roles: Warehousing & materials handling, Transport, Trade-offs
• Trade-off KEY: Packaging lowers theft levels BUT increases product value and carrying costs

DEVELOPING PACKAGING SOLUTIONS – Must Know:

• 2 Categories: Consumer packaging vs Industrial packaging
• 5 Materials: Glass, Paper, Plastics, Metal, Wood
• Pallets: 2 main types (Block, Stringer-type) + 4 options (Reversible, Wing, Two-way, Four-way)
• Bulk packaging: Bags, Metal drums, Rigid plastic containers, Wood containers
• Cost trade-offs: ALL cost components must be considered — manufacturing, filling, handling,
storage, distribution
• Legislative challenges: Must comply with labelling laws (SA: Foodstuffs, Cosmetics & Disinfectants
Act)
• Environmental concerns: Use LCA; recycle and reuse; consider at design stage

CONTAINERISATION & TECHNOLOGY – Must Know:

• ISO container lengths: 20 ft, 40 ft (most used), 45 ft, 48 ft, 53 ft
• Container types: Standard, High-cube, Hard-top, Open-top, Flatracks, Platforms, Ventilated,
Refrigerated, Bulk, Tank
• Smart containers: Use RFID, satellite, or cellular tech to sense and report changes
• Smart container benefits: Transparency, Security, Reduced waste, Efficiency, Compliance,
Environmental impact
• Barcodes: Laser scanners (fast, retail) vs Image-based scanners (versatile, QR codes)
• RFID: 10 benefits — tracking, handling, counting, availability, automation, manufacturing, recalls,
theft, compliance
• Multi-tech integration: Combines logistics software + CRM for real-time tracking and better customer
service

🧠 MASTER MEMORY TRICKS

4 Packaging Layers: "Pretty Suits Underpin Delivery" = Primary, Secondary, Unit Load, Distribution
5 Packaging Materials: "Great Pandas Play More Wildly" = Glass, Paper, Plastics, Metal, Wood
5 Packaging Functions: "Containing Products Communicates Unique Promotion" = Contain, Protect,
Communicate, Unitise, Promote
Smart Container Requirements: "Detect Sense Sense Communicate" = Breach detection, Internal sensing,
Cargo sensing, Location communication
10 RFID Benefits: "Tracking, Handling, Counting, Fixing, Availability, Automation, Manufacturing, Recalls,
Theft, Compliance"

Source: STADIO (Pty) Ltd Logistics Management I – LOG100/LOGD152, Topic 3