Secondary contract packaging is the use of a 3PL or other outside vendor for the final packaging of a product. This involves the packaging of product (often a solid, powder, gel or liquid) that has already been primary packaged. Primary packaging is the packaging that is in direct contact with the product. Examples of this include bag-in-box packages where sealed bags of product are inserted into chipboard retail cartons, and bundle wrapping where packages of product are bundled and shrink wrapped together to create economy-size packages often sold in big-box warehouse club stores like Costco and Sam’s. Another variation is the kitting or assembly of variety cases (a.k.a. “rainbow” cases).
When should a company partner with a 3PL for secondary contract packaging or contract packaging in general? Typical reasons for a business to opt for a secondary contract packaging solution include:
- High investment costs to meet regulatory and environmental requirements.
- A new package form needs to be market tested prior to widespread use.
- There’s a large surplus inventory of product that needs to be packaged differently to make it saleable.
- The organization is expanding distribution from local to regional or from regional to nationwide and multiple facilities are needed in different geographic locations to package and distribute product across a much wider area.
- There is no available in-house equipment or trained workforce to do a particular packaging job.
- A company is switching to new packaging forms that have never been produced by the team on their equipment.
- The in-house equipment and workforce are already being used for other higher priority projects.
- Actual or projected demand will significantly over utilize or under utilize your packing lines, either in the short run or long term.
- Any special short-run scenarios such as holiday gift packs, other seasonal packing or new product market testing that would require new equipment to package in house.
- Marketing program may call for the limited-time use of non-standard packaging or promotional inserts requiring special machinery or labor intensive work to assemble.
- It may be more economical to manufacture a product at a remote location, and then ship that product in bulk to a local market where it is unit packed for local sales.
- Short-term project requirements call for specialized equipment or skilled labor not available in house.
- Operational issues such as plant closings for maintenance and/or upgrade, or a shortage of trained labor.
- Limited in-house capacity due to downsizing in personnel and/or facilities.
In future posts about secondary contract packaging tips on how to select the right contract packager and the steps needed to take to make sure the project start up is seamless and the new relationship established with the partnership gets off on the right foot will be discussed.
FW Warehousing is headquartered in St. Louis, Missouri with Midwest warehouse distribution centers in Kansas City, Indianapolis and St. Louis totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, FW later broadened its services to include contract warehousing, dry storage, hazardous material and chemical storage, temperature-controlled storage, product distribution and B2B and B2C fulfillment.
FW Warehousing has more than 50 years of experience in third-party 3PL logistics and has been ranked in the top 100 Third Party Logistic Companies in the country by Inbound Logistics magazine.
For more information about FW’s full range of logistics services including its secondary contract packaging capabilities, visit the FW Warehousing website.