PACKING AND PACKAGING

CHAPTER 5

Chapter ObjectiveAfter reading this chapter, you will be able to understand –

• Explain the conceptual framework of packing and packaging in trade logistics

• Explain the need for packing and packaging in international logistics operations

• Elucidate the difference in packing vs. packaging, and packing list vs. packing note

• Explain the need for protective packing so as to protect the cargo from transport hazards

• Discuss the various precautions for protective packing in international trade logistics

Introduction

• Rightly considered as the fifth P of marketing as suggested by McCarthy

• It adds value to the product• For international market packaging and packing not

only adds value, but also protect them from various hazards during the course of international transportation and logistics operation

• Also communicate many precautionary instruction in the intl. Logistics chain

• The package is the buyer’s first encounter with the product and is capable of turning the buyer on or off

Need for packaging in International trade• Export packaging in the globalized era, is generally referred

to as an essential component of a product as it helps in delivering the product to the consumer in a protective yet stylish manner

• Sales are also dependent on good packing & packaging, to a certain extent

• Packaging also acts as the branding tool as it plays an important role in communicating the image and identity of a company to the target consumers

• It is aimed at containing, identifying, describing, protecting, displaying, promoting and transporting it

• It also makes the product marketable and keeps it clean, hygienic and fit for use for the ultimate consumer

The various functions of export packaging

The salient objectives of packaging and packing are outlined as:• Protection and preservation of product’s contents• Protection from physical hazards• Protection from climatic hazards• Transit vital information to consumers• Promote business sales• Facilitate security of goods in international

transportation• Convenience in product dispensing and usage• Containment and aggregation• Facilitates portion control of goods

Damages may happen during international trade

Packing Vs. Packaging

• packaging is a basic function of product value addition, and refers to an outside wrapper in which the product reaches to the end consumer in domestic or international market.

• Packaging ends with the life of the product, after having served the purpose for which it has been created

• Packaging acts as a potent tool that plays an important role in marketing and selling the product

Packing Vs. Packaging Contd.

• Packaging, on the other hand should not be confused with packing as packing is a secondary function

• The main purpose of packing is to ensure the safe transportation of goods from the place of its production to the retails store where the end user or the consumer will buy it

Packing Vs. Packaging

Packing List Vs. Packing Note• As per manually accepted international documentation standards,

an exporter has to prepare a packing list or cargo manifest along with other trade documents that are submitted to custom authorities at the time of export clearance of cargo from customs

• The packing list provides the detailed information about the cargo-the number of boxes or containers, the products inside along with International Trade Classification (ITC), Harmonized system(HS) code, color, sizes, dimensions, bar code and serial no.’s etc

• It is important to note that in case where quantities, weight, or content of the various packing cases vary in an export shipment, it is mandatory for the exporter to provide specific details of such cargo in the packing list for each carton. The exporter should clearly mention its color, weight and measurements

Packing List Vs. Packing Note• Packing list usually includes the external dimension of each carton

or pack, the total cubic content and total weight of the shipment to be exported. The packing list is also called shipping list, packing slip, bill of parcel, unpacking note, packaging slip, delivery docket, delivery list, customer receipts, or consignment note

• In some countries, cargo manifest or packing list are not mandatory document required by the customs authorities, but serves the purpose of cross-checking the cargo by customs officials from various importing countries

• Expert in logistics differentiate between a packaging list and packaging note. The main difference between packing list and packing note is that packing note is used in domestic business, whereas packing list used in international trade and logistics operations.

Packing List – A vital source of information in international trade logistics

Packaging and Transport Hazards• The major challenge in design packages for goods and

packing for cargo is to find out a cost-effective solution that may ensure complete protection to goods in the process of transportation from one country to another without any damages.

• Packaging may be defined as the means of ensuring the safe delivery of a product to the ultimate consumer in sound condition, at the minimum overall cost

• Hence, the packing of export consignment must be strong enough to protect its content against the physical, bacterial, and environmental hazards of transportation, especially during a voyage by sea

Packaging and Transport Hazards Contd.• Packaging of cargo should be strong enough to withstand

against hazards such as dampness, water spillage , rough handling during loading and unloading, improper stocking and stowage, and poor physical protection to cargo, leading to theft and pilferage

• In addition export goods also needs protection against spillage from boxes, ingress of dirt or other foreign material, egress of moisture and dampness, entry of insects or moulds, fungi or other infestation, and contamination of cargo during international transportation

• The contents of product have to be essentially protected and preserved by foolproof packing so that hazards such as bacteriological attack on goods, enzymatic reactions, and oxidation of goods can be best minimized

Some more Transportation Hazards :The common hazards to air transportation are listed herein below:

Packaging and Transport Hazards Contd.• If export goods are not properly packed and are having

danger of being damaged or putting other goods under damage, the shipping company does not accept such goods for loading on ship or even if is accepted for loading, the mate( representative or officer under charge of the captain of the ship) will issue dirty, claused, or unclean mate’s receipt

• In such circumstances, the shipping company will issue dirty, claused, or unclean bill of lading as the packing of goods is unsatisfactory

• Under UCP 600 ( Uniform customs and practices) provisions, bank may not accept or honor such claused bill of lading for negotiation and international payments

Packaging and Transport Hazards Contd.• Proper export packing of goods, on the other

hand, can protect them against most of these transport hazards. However, export packing should also be not as such that it may attract additional freight expenses without any reason

Factor affecting packing material cost

Kinds of cushioning material

Choice of packaging material for international logistics• Transit of goods from one country to another

may be hazardous and requires attention on the part of the consignor to ensure proper packing of cargo, so that it can be saved from external and internal damages that may come up during the course of transit

• There are different kind of packing and packaging material that can save the product from such transit hazards

• There are some issues and factors need to be consider while choosing material for packing

Issues in the choice of packing material

Choice of packaging material for international logistics• The packaging material should be specific to its

sustainability to the product• The packaging for export products in

international trade logistics is classified into the following categories:- Plastic Packaging-Paper based packaging- Combined plastic and cardboard packaging- Miscellaneous Packaging

Common types of plastic used in export consignment

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