Reusable containers: Putting a cap on your container needs
October 06, 2010 - MMH Editorial
Wooden and plastic pallet pooling gets most of the attention, in part because there are so many pallets in the market. But users of plastic containers have a pooling and container management alternative, too, from Container and Pooling Solutions, or CAPS.
“Basically, we’re a leading provider of returnable container management solutions in the U.S., Canada and Mexico,” says Drew Merrill, vice president of business development and strategic planning for CAPS.
CAPS breaks its service offerings into five buckets, no pun intended:
• Dry returnable containers for automotive and general manufacturing companies, especially Tier 1 automotive suppliers and manufacturers.
• Liquid returnable containers, or intermediate bulk containers, for non-hazardous liquids.
• One-way bulk corrugated liquid container for international shipments.
• A Web-based tracking system that CAPS uses to track its pool of pallets, but which can also be used as a standalone service for companies that want to own and manage their own pool of containers.
• Container-related repair and maintenance services throughout the lifecycle of a returnable container. CAPS operates eight service centers for users who own their own fleet of containers, but want to outsource the maintenance of their assets.
Companies turn to CAPS for a variety of reasons, according to Merrill. Cash is a big reason: It takes a lot of it to build a fleet of returnable containers big enough to serve the needs of auto parts suppliers, for instance, who are sending containers out every day, but not getting all of them back every day.
Using a pool allows a manufacturer to only rent the containers it needs. “In the automotive industry, for instance, someone may reuse your containers for your competitor’s programs or their work-in-process. Or, some of your pool will simply disappear through shrinkage,” says Merrill. “Either way, you have to increase the size of your fleet of containers because you don’t have visibility across the supply chain.”
On top of that, there is generally a shelf life to any automotive, or other manufacturing, model program: A supplier buys a fleet of containers to deliver parts for a specific model, then has to replace those containers five years later when a new model is introduced. “At the end of that five years, the old containers just go into a back room if you own your containers,” Merrill says.
There is no average price for the program, since there are a number of variables, everything from the size of the container to the internal dunnage required, the cycle time and the operating environment. The pooling model, however, is relatively simple. When CAPS takes on a new customer, it analyzes the overall program and then quotes an all-inclusive fee that includes the delivery of the asset, along with recovery, repair and inventory tracking and management. “The bottom line is that we have to have a better price point or we cannot get in the door,” says Merrill.
For an automotive supplier with plants in Mexico, for instance, CAPS has created service centers along the Mexican border to maintain an inventory of 35,000 containers in seven different sizes. Each day, the manufacturer submits orders to CAPS headquarters in Livonia, Mich. Those orders are transmitted to a service center near the plant, where the required containers are removed from inventory, scanned and prepared for pickup by the manufacturer’s trucks. After the manufacturer fills the containers, they scan them out to various automotive assembly plants in North America. Those data feeds also go to CAPS, which can then track the location of each individual container.
Once the auto manufacturer empties the containers, they’re ready for pick up and return to a CAPS service center. In this instance, CAPS may pick up the containers, the manufacturer may pick them up, or they go through one of the auto manufacturer’s distribution centers for a return. Once they arrive back at a service center, they’re scanned back into inventory. “Since every container is individually identified, we know which containers have been lost,” says Merrill. “That’s critical when you get into loss and damage credibility.”
That same container tracking service can be used by companies that prefer to own and manage their own fleet of containers. “We can be accessed as a software-as-a-service model with a monthly subscription fee,” says Merrill. “For companies that are going to get bank financing or a bank lease, it’s a critical service, because the lender wants to know that they have some way of tracking the collateral that backs the loan.”
Pallets and containers: A CHEP off the old block
More than a decade after entering the North American market, CHEP continues to be the leader in pallet pooling.
Pallets: Pallet pooling for the other guys
Upstart PECO Pallet brings competition to the pallet pooling market
Pallets and containers: The plastic pool alternative
iGPS offers pallets users an alternative to wood