A better supply chain serves us all. Let's eat.

4 Ways to Close the Hatch on the Plastic Pirates of the Supply Chain

Posted by IFCO Systems
June 29, 2016

Reusable plastic containers and pallets are indispensable workhorses of the supply chain. And in spite of their durability, these unsung assets often do not serve their full useful lives. While still in their prime, too many of them fall prey to the pirates of the plastic underworld.

Plastic theft is a case of simple economics combined with glaring opportunity, involving assets frequently overlooked and left unprotected. A thief can sell a pilfered crate for 50 cents to an unscrupulous recycler, who in turn can grind it to recover $2.50 worth of material. A plastic pirate can generate $50,000 to $60,000 in half a year, according to one investigator.

Grocers, and indirectly consumers, bear the pain. The replacement of stolen or otherwise missing reusable containers costs the industry over $500 million annually.

Individual companies and various coalitions have had some success in funding police task forces or in hiring private investigators to collaborate with local law enforcement in curbing theft. In March, Miami authorities shut down a plastic theft operation after an eight-month investigation, resulting in 20 arrests. Around $30,000 worth of shredded plastic was found at the recycler, along with about 2,900 stolen milk crates. Unfortunately, such collaborative efforts have been limited in number and scope, and as a result, so have their results.

In case you feel lost at sea with respect to how to deal with plastic pirates, here are four quick ideas:

  1. Make sure that everyone knows how much the containers are worth. Often, employees or trading partners assume that a plastic pallet or crate has little or no value, and treat it accordingly. Once they understand the value, they will more likely make decisions that prevent asset loss. In many cases, a phone number is located on the container for easy returns, mitigating any unnecessary costs associated with misplaced assets.
  2. Don’t leave assets exposed. Reusable packaging that is stored in unsecured places such as open docks, parking lots or unlocked trailers makes the job too easy for plastic thieves. Increasingly, facilities that do not have room indoors are at least constructing secure fenced areas or using locked trailers to store these assets.
  3. Train and supervise “chain of custody” decision makers. Frontline personnel make conscious or inadvertent decisions that keep the assets under your control, or allow them to slip away. Effective training and supervision will prevent costly mistakes such as:
    • Leaving assets exposed in an unsecure areas
    • Allowing unauthorized outsiders to “help declutter your dock” by permitting them to remove empty pallets and containers from your facility
    • Shipping reusable packaging to trading partners which have not formally agreed to return it
    • Failing to pick up empty packaging from customers, or casually leaving it behind at pickup locations to make room for backhauls
    • Using them for unauthorized purposes
  1. Appoint a reusable asset project manager. If you have a serious asset loss issue, the appointment of a project manager can have an ROI of just a few months. The project manager, with the support of a powerful sponsoring executive, can initiate the tasks listed above. In addition, the empowered manager can help transition your company towards a more proactive asset management system, instilling employee and stakeholder accountability, and working toward instituting an effective control system. As technology continues to mature and prices fall, the business case for the RFID tagging of even inexpensive reusable assets is becoming increasingly interesting. Armed with accurate data that identifies problem points for container loss, the project manager can work to close those holes, and shut the hatch for good on plastic pirates. And, in many cases, a phone number is located on the container for easy return shipments.

Supply chain cost savings