Many logistics managers focus primarily on the purchase price when managing returnable packaging in distribution centres. It is tempting to choose the cheapest option when sourcing carriers, especially when budgets are tight. But is this the best solution for selecting logistic carriers?
In 2025, the logistics industry faces many challenges, such as geopolitical conflicts, climate change, high inflation and interest rates contributing to the fragmentation of the global trading environment. According to the 2024 State of Logistics report, while some markets are experiencing growth, others are struggling with stagnation and overcapacity.
With such a volatile supply-chain situation, companies balance new investments and strategic sourcing to optimise logistics costs. Hence, decisions often arise to purchase the cheapest possible carriers.
However, investing in low-cost packaging often does not bring benefits, but results in higher long-term costs due to its operational inefficiency. Therefore, to make the right decisions, it makes sense first to analyse and then optimise the total cost of ownership (TCO) of packaging.
TCO: What It Is and Why It Matters
Total Cost of Ownership (TCO) includes all expenses associated with acquiring, operating and maintaining assets throughout their life cycle. In the context of logistics, it contains many packaging factors, such as acquisition, transportation, storage, maintenance, operational, or recycling and disposal costs. By evaluating TCO, logistics managers can make informed decisions that increase efficiency while reducing hidden costs.
Why isn't a low initial carrier’s cost always a wise choice?
While a seemingly low media purchase price may seem attractive, it often masks additional expenses that come later. Inferior packaging leads to higher maintenance costs, increased damage rates and lower operational efficiency. Therefore, understanding TCO is critical to choosing carriers that offer long-term value and sustainability.
A Crucial Factor in Reducing TCO in Logistics
The first step toward cost optimisation is choosing the right type of packaging for specific operational needs. The right choice affects the efficiency of the supply chain, the speed of operations and the durability of the carriers. This is especially important in closed distribution circuits, where the same packaging is used repeatedly. Well-designed returnable packaging increases loading efficiency and ensures compatibility with automation systems.
7 Key Questions to Consider When Choosing Carriers
1. Initial cost vs. long-term costs
- Does choice of cheaper packaging mean higher repair and replacement costs in the future?
- How long will the selected packaging last in my circulation?
- Does the price difference between the cheaper and more expensive option justify the differences in durability and functionality?
2. Durability and life cycles of carriers
- How many cycles of use (shipments) will the packaging withstand?
- What are the maintenance and service costs per year?
- Can it be easily repaired if damaged?
3. Operational efficiency
- Do the carriers allow for easy and quick loading and unloading?
- Are the shape and dimensions optimised for transportation (e.g., stacking, saving storage space)?
- Is the packaging compatible with existing logistics systems (e.g., automated sorting lines, warehouse robots)?
4. Maintenance and repair costs
- How often do the carriers require repairs?
- What is the cost of repair versus replacement with new?
- Should I use external repair services, or is it better to do it in-house?
5. Managing seasonal peaks
- Do we have enough carriers for peak sales periods?
- Is it better to buy more logistic means or rent additional units during the season?
- What are the costs of storing excess carriers in the off-season?
6. Losses, tracking and security
- What are the annual packaging losses in our system (theft, loss, damage)?
- Is it worth implementing a packaging tracking system (e.g. RFID, QR codes)?
- What solutions will reduce the risk of lost packaging and unauthorised use?
7. Recyclability and resale
- Are the carriers recyclable or reusable?
- Is there an option to sell a used one?
- What are the costs of disposing of carriers at the end of their life cycle?
Indeed, choosing the proper returnable packaging requires analysing the product's entire life cycle, not just targeting the purchase price. By examining the above issues, you can reduce costs, improve supply chain efficiency, reduce waste and improve packaging control.
How Can We Help Reduce Your Company's TCO for Logistics Carriers?
We don't want this to sound like an advertisement. Still, at Rotom, we help companies across Europe with technical advice and the selection of the proper packaging for each chain, including designing and manufacturing a customised logistics carrier. In addition, we provide support in the form of services that will reduce TCO over the packaging life cycle.
With that in mind, let's check out what this looks like in practice.
Repair and maintenance
Even the best packaging is subject to wear and tear. Regular repair and maintenance extend their life, reducing the need for premature replacement and lowering the total cost of ownership.
As part of repair, Rotom offers:
- On-site or off-site repairs of roll containers, pallets and other types of packaging
- Inspection and preventive maintenance programs to catch minor defects before they become costly failures
How does this work for customers?
One global mineral wool manufacturer consumed vast quantities of dedicated pallets in its supply chain. The purchase of new units generated high costs, while at the same time, there was no effective system for recovering and repairing the damaged packaging. In cooperation with Rotom, our specialists implemented a system to recover and repair pallets, which are redelivered to the customer's warehouse. Each pallet undergoes quality control and repair, allowing the same carriers to be reused.
As a result:
- 20,000 pallets are repaired each year, instead of being replaced with new ones.
- Savings, because the repair cost is 30% of the price of a new pallet.
- Less waste and more stability in the supply chain.
- Reduced carbon footprint and compliance with sustainability policies.
By partnering with Rotom, the customer not only lowers TCO by reducing spending on new pallets, but also meets environmental goals by minimising waste and reusing resources.
Learn more about the role of repair in extending the life of packaging in WP: Product lifetime extension is sustainable.
Rental as a flexible way to use packing carriers
Distribution centers often face seasonal peaks in demand for logistics carriers. Rather than over-investing in a fixed packaging inventory, consider renting additional packaging during demand periods to reduce capital expenditures and lower the average total cost of ownership. A packaging rental service provides:
- Flexible access to high-quality standard packaging at peak times.
- No need for costly inventory during quieter periods.
How does it work for customers?
For one of the fastest-growing retail chains in the world, opening more than 260 new stores a year, Rotom implemented a solution based on roll container rental, which allowed the company to secure operations during supply disruptions instantly. Within days, the client received 12,000 roll containers, delivered in 40 trucks, ensuring smooth deliveries and continued expansion.
As a result:
- Delivered 12,000 roll containers in record time.
- Secured the supply chain despite global disruptions.
- Client avoided losses associated with delays in opening new stores.
- Opted for a flexible solution - renting for 3–4 months instead of costly purchase.
By using carrier rental, the client not only maintained operational stability at a critical time, but also optimised costs and avoided over-investment in equipment that could be returned after peak demand.
How else does rental support supply chains? Read WP: Rental, shared usage of logistic means.
Responsible recycling and purchase of carriers
Sustainable practices in logistics include responsible recycling and purchase of used packaging. By doing so, companies can minimise waste and recapture its value. Combining the redemption of old carriers with the delivery of new products can ensure a continuous flow of efficient and sustainable packaging solutions. To this end, Rotom offers services such as:
- Buying back used packaging, reducing disposal costs.
- Recycling for responsible handling of end-of-life packaging.
- Seamless replacement with new or remanufactured packaging to keep media circulation flowing.
You can read more about this in the article: Why packaging buyout succeeds?
Summary
For logistics managers managing returnable packaging pools, understanding the total cost of packaging is critical to optimising spending, improving efficiency and supporting sustainability goals. Whether you operate euro pallets, roll containers, gitterboxes or other carriers, remember that a low purchase price is just the beginning. What's important is how much that packaging costs over the lifecycle.
If you want to learn more about responsible logistics services or support from experienced experts, contact Rotom.
