E-commerce changes lead to new demand for protective packaging

Monday, 26 June 2017

Online shopping is more popular than ever, which means retailers around the globe are altering their packaging strategies to accommodate more frequent but smaller shipments. This inevitably means that companies may need to update their protective packaging operations with new packaging materials or upgrade their packaging machinery.

European B2C e-commerce turnover has been steadily growing annually by around 13% over the last few years, according to E-Commerce Europe, sales reached €510bn in 2016. In Western Europe, the UK topped the list in 2015 at €157bn, followed by France at €64.9bn and then Germany at €59.7.

So how do these increases impact packaging and logistics? Well some major carriers like FedEx and UPS have already changed their rate formulas to favour smaller, lighter packages. This has further incentivised retailers to evaluate their packaging strategies and make changes in an attempt to save money on shipping fees.

In terms of protecting goods in transit, these major changes in consumer behavior and the steady growth in e-commerce, it’s not surprising that growth is predicted for the protective packaging and protective packaging machinery industries.

Protective packaging to grow

ReportLinker recently released data that shows that over the next eight years, the protective packaging market will see increases of 6.7% percent per year. In another report from MarketsandMarkets, they also found a similar annual growth rate between the years 2015 and 2020 with an expected growth of around 6.39% percent growth per year. This would bring the global protective packaging market to $35.82 billion by 2020.

Reliable, protective packaging machinery essential

As companies continue to alter their protective packaging strategies to accommodate the growth of direct to consumer shipping, new equipment will also be needed. According to PMMI, the Association for Packaging and Processing Technologies, the food and beverage industry is leading the demand for packaging shipments. Interestingly, the pharmaceutical and beverage markets are tied for the fastest growing market segments.

Different product categories have different packaging requirements and priorities. For instance, the biggest concern when shipping clothing is keeping it clean; when sending glassware, it’s preventing breakage; and delivering food requires careful temperature control planning and defending against contamination. Companies need to be sure their packaging strategies are compatible with changing carrier rules and consumer preferences.

As consumer preferences change, carrier regulations are adjusted and global trends continue to shape the protective packaging market, many businesses will find they need to move quickly and make intelligent packaging decisions to remain profitable and be seen to be packing sustainably.

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