Pack Smarter, No More Cheap Labour

The rise in Employer National Insurance in the UK is but one factor set to impact ecommerce packaging. What can be done to alleviate the pain? Jo Bradley (pictured below), Business Development Manager at Sparck Technologies suggests a hi-tech panacea.

If distribution and fulfilment operations ever did benefit from ‘cheap’ labour, a series of recent Government announcements has ensured that era is well and truly over. Controlling labour costs through automation is no longer optional – it’s a question of business survival.

In short order, the UK Government has first raised the minimum wage by significantly more than inflation to £12.21 an hour for workers over the age of 21, Employer National Insurance contributions are rising from 13.8% to 15%, and in a further twist, this will now apply to workers on annualised pay of as little as £5,000 rather than the previous £9,100.

That last provision in particular hits the many fulfilment operations that are heavily dependent on seasonal or casual employees to cope with peak in activity. This patten of employment is about to be even further challenged by the extension of a range of workers’ rights to ‘day one’ of employment. Details are as yet obscure, but they certainly aren’t going to reduce employment costs.

The response must lie with automation, but particularly in the current uncertain economic climate, few businesses can afford the investment or business disruption required to go ‘full Amazon’ across activities such as retrieval, order picking and internal transport. These tend to be heavily interdependent, and ‘step by step’ approaches can be problematic.

One area that for many fulfilment operations can be treated as a standalone project, with the prospect of significant reductions in labour requirement, and thus an attractively quick Return on Investment, is that of packing and labelling goods into cartons for transport. Ecommerce operations, in particular, can stand to reap big rewards in terms of savings in labour and material costs, as well as boosting productivity and performance at peak, if the right approach is taken. Our repeated customer experience is that using ‘fit to size’ automation to fold and build boxes around consignments – even of mixed and varied goods – followed by auto sealing, weighing and labelling, can see one or two operators replacing as many as twenty manual packing benches.

But in selecting automated packaging technology businesses shouldn’t focus on labour costs alone. There are other cost pressures looming, and other benefits to be reaped. On costs, the revised Extended Producer Responsibility regulations are about to come into effect. These are complex, involving fees and credit notes and a significant administrative burden, but at heart they involve a levy on the use of packaging materials. Precise rates are yet to be fixed but the Government’s current mid-point estimates are around £190 per tonne for paper and card, and a deliberatively punitive £425 per tonne on plastic packaging materials.

Jo Bradley

This is intended to encourage firms to reduce the use of packaging materials. Fortunately for ecommerce businesses the right form of packaging automation can also provide a highly effective solution to this issue too. Sparck’s ‘fit-to-size’ automated packaging systems not only minimise the use of card used, by tailor-making a box for each individual order, but can also eliminate the need for void fillers which are often plastic based.

Those savings can go straight to the bottom line. But there are other less easily quantifiable but nonetheless real benefits. Well-fitting boxes reduce the incidence of shock or crush damage in transit. They economise on the use of transport space, which can also yield cost savings, on fuel obviously, but also in warehouse labour as there may be fewer roll cages to push around. And right-sizing removes what research consistently shows to be one of consumers’ biggest gripes about e-commerce and home delivery – oversized boxes!

These factors together make a robust case for automation. But as employment costs bite, the labour-saving arithmetic of fit-to-size automation alone will undoubtedly present a fast and sure Return on Investment for many businesses.

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Sustainabile e-commerce Packaging at LogiMAT 2025

A shortage of skilled workers and rising customer expectations pose challenges for e-commerce. Creative solutions are needed – this is also reflected in the motto of the international trade fair LogiMAT 2025. From the 11th to 13th March, companies from the intralogistics sector will be presenting their ‘Passion for Solutions’ in Stuttgart, Germany. For Henkel Adhesive Technologies, this passion takes clear forms: With its versatile adhesive innovations from the Technomelt E-COM portfolio, the company enables automated, right-sized packaging technology as part of an efficient value chain.

Against the backdrop of growing sustainability awareness, oversized shipping packages with lots of filling material are no longer up to date. Right-sized packaging offers a solution to this problem: with automated packaging technology, the size of the products to be packaged is recorded by a scanner and the shipping carton or envelope is precisely matched to it. The subsequent gluing with a hot melt adhesive from Henkel saves additional packaging material in the form of adhesive tape and enables subsequent recycling. The elimination of filling material also results in significantly less waste. Since the packaging is folded precisely around the product, there is hardly any wasted space. At the same time, the transport volume is reduced, allowing more parcels to fit into a single transport unit. In addition to the cost savings from reduced material consumption, the CO2 emissions per parcel are also reduced – a sustainable packaging solution that, thanks to automation, offers flexibility in the face of fluctuating staffing levels.

Designed for sustainable e-commerce packaging

With the introduction of its latest adhesive innovation, Henkel is making the proven packaging automation even more sustainable. Technomelt E-COM G5 Eco Cool has been developed specifically for e-commerce and contains a high proportion of bio-based materials. In addition, a lower application temperature means less energy is required in the packaging process. Henkel’s product highlight at LogiMAT 2025 thus enables companies to optimize the sustainability of their packaging at two points in the value chain and reduce their carbon footprint. The adhesive is compatible with the paper recycling process and is certified as such by cyclos-HTP.

The fact that a solution can only be as successful as the cooperation network behind it is a clear advantage in this case. Henkel is networked with all machine, substrate and tank equipment manufacturers worldwide. For Henkel adhesives, this means that they are put through their paces. In this way, the company ensures that it has the right hot melt for every type of paper and board in its extensive product portfolio. “Our customers don’t just buy an adhesive, they buy a complete package,” says Eike Dominiak, Business Development Manager E-Commerce Packaging. “Thanks to our extensive cooperations, companies don’t have to put up with long qualification phases and possible incompatibilities. Our adhesives are optimized for all packaging substrates and can be easily applied with all standard dispensing equipment.”

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