AN INTERDEPARTMENTAL
CO-ORDINATIQN STUDY OF
PACKAGING AND PHYSICAL

DISTRIBUTION FUNCTIONS

THESIS FOR THE DEGREE OF
MASTER OF SCIENCE

MICHIGAN STATE UNIVERSITY

MARGARET LEE ANTOKOL

1974

    
 

 

 

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ABSTRACT

AN INTERDEPARTMENTAL CO-ORDINATION STUDY OF
PACKAGING AND PHYSICAL DISTRIBUTION FUNCTIONS

By
Margaret Lee Antokol

Packaging and physical distribution (transportation), both
relatively newly recognized functions, can be focal points
for economically beneficial intracompany co-operation and

co-ordination. For years companies have been interdepart-
mentally competing and ignoring the total systems benefits

from co-operation.

Talks with packaging and physical distribution personnel,
empirical library reference research, and observations of
on site company policies and procedures provided the major

input for this work.

The purpose of this thesis is to provide an avenue of under-
standing between the problems faced by the packaging special-
ist and the physical distribution (transportation) specialist.
Within the text, the interdependent functions of the two

departments are explored and possible co-ordination routes

are formulated.

AN INTERDEPARTMENTAL CO-ORDINATION STUDY OF
PACKAGING AND PHYSICAL DISTRIBUTION FUNCTIONS

By

Margaret Lee Antokol

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements

for the degree of

MASTER OF SCIENCE

School of Packaging

1974

DEDICATION

To Stokely and Littlefellow who

stood by me through the entire project

ii

ACKNOWLEDGMENTS

I wish to thank the S. C. Johnson & Son, Inc., Mr. Robert G.
Nugent, Package Engineering Supervisor for giving me the
opportunity to do this work and prepare this thesis. Also,
I'd like to give special appreciation to Dr. Guinilla Jonson
and Mr. Ernest Haller for technical advise and moral support.
And, a special thanks goes to Mrs. Lillie E. Rolle and Ms.

Tina Sherk for their excellent help and infinite patience in

typing this thesis.

iii

TABLE OF CONTENTS

Chapter Page
1 History of Shipping . . . . . . . . . l
2 History of Packaging . . . . . . . . . 6
3 Packaging Functions in a Physical

Distribution Network . . . . . . . . lO

4 Governmental Regulations . . . . . . . 14
5 Packaging as a Modal Influence . . . . 31
6 Co-operative Interaction . . . . . . . 36
Bibliography . . . . . . . . . . . . . . . . 44

iv

History of Shipping

 

Business logistics has been defined by Ronald H. Ballou as
"the planning, organizing, and controlling of all move-store
activities that facilitate product flow from the point of
raw material acquisition to the point of final consumption,
and of the attendent information flows, for the purpose of
providing a sufficient level of customer service (and asso—
ciated revenues) consistent with the cost incurred for over-
coming the resistance of time and space in providing the

service.” 1

This definition encompasses all phases of a business opera-
tion and lends itself particularly to those operations called
physical distribution/transportation and packaging. The sys-
tems viewpoint has, unfortunately, not been universally
accepted nor applied. Although the principle of comparative
advantage, that is, the specialized production of commodities
particularly suited for a specific area and the resultant
trading of that area's surplus with the surplus of another
specialized areas9 has been practiced for centuries, compar-
ative advantage is glorified with the advent of the giant
corporations and conglomerates. Because of high concentra-
tion in the industries, a systems concept of physical distri-
bution, or business logistics, must be devised and implemented
to assure an economical and systematic materials flow. A
brief look at the development of transportation modes enables

one to grasp the rapid state of flux in this industry.

2

Before 1817, the United States had no real transportation
system. Loads were drawn by heavy, 4-6 horse team wagons,
and the dependability or reliability of the method reflected:

1) road conditions

2) season of the year

3) possibility of backhaul

4) level of wages and prices (wide fluctuations)

5) competitive conditions

The U. 8. Senate reported that the cost of shipping goods
from Europe to America equalled the $9.00 cost for 30 miles
of internal land transport! Land transport rates ranged
from 30¢ - 70¢ per ton-mile. Other modes of transportation
included ocean-going vessels and lake sailing ships. Goods
were high priced and scarce because the country lacked ade-
quate and efficient transportation networks. News did not
travel quickly; consequently, new product information was

slowly received.

With the advent of turnpikes, canals, and railroads during
1817 - 1860, United States industry surged forward. The
average speed of 2 mph for heavy freight was increased to

10 - 15 mph with the opening of the canals and the subse-
quent appearance of steamboats. Prices for hauling freight
by land and water dropped drastically from the 30¢ - 70¢ per
ton-mile to 12¢ - 17¢ per ton-mile. By 1860 freight volume
was moving five times that of post 1817. The railroad

altered transportation patterns. Offering lower rates of

3
1.2¢ - 6.25¢ per ton-mile and speeds up to 20 mph, these

railroads revolutionized domestic commerce.

The stagecoach pOpulated the new turnpikes in areas where
water transport was not available. Ships traveled from the
South to New England via coastal water routes and the Great
Lakes area,and the canal system from.New York to Philadelphia
grew in importance. The period witnessed a great growth
surge with the settlement of the west as well as a dramatic
numerical increase in population. Domestic trading flour-
ished among the industrialized East, the agrarian West and
the cotton-producing South. Manufacturing surged tremen-
dously and transportation network improvements provided an
impetus for this rapid growth. Physical distribution quickly

became more than simply transportation.

The years after the Civil War again saw a growth in trans-
portation methods. Motorized transport debuted with the
automobile and truck, and became the new way to ship. Rail-
roads held their own, but through increasing governmental
regulations and competition of the motor carriers, they were
beginning to feel the pangs of middle age. The impact of
World War I brought the whole world closer together and
availed people to more goods and services than ever before.
Radio made its debut and subsequent advertising spread ideas
and products and business had to keep pace with these new

demands in any way it knew how.

Marketing and marketing concepts appeared around 1900 and,

4
until 1910, people found themselves in a discovery stage,

with new ideas of the consumer and industry.

The main thrust of marketing was how to sell the product.
From 1910 - 1920, the "period of conceptualization," the
basic concepts of marketing were formed in an increasingly
urbanized and industrialized country. 1920 - 1930 witnessed
a "period of integration" where market functions were ana-

lyzed with marketing research and methodology procedures.

Although 1900 - 1930 were production-oriented decades with
problems of capacity creation, work methods, and volume pro—
duction, they also were periods of great prosperity and
excitement. The intricacies and implications of what indus-
try was doing had not yet been noticed, yet people eventually
would rebel at the mass marketing, sales of shoddy goods, and
the lack of responsibility on the part of the seller. This

was still the era of caveat emptorl

Although sales were high and business generally profitable,
the business world finally turned its attention to the pro-
cesses other than production;3 Borsodi sums up this think-
ing: "The day is gone when the recipe for fabulous profit
was simply 'production; more production; and still more pro-
duction.‘ The golden age of production is past. The age of

distribution is upon us." 13

This era saw sales emphasis begin to grow into a consumer-

oriented industry. Confused thinking usually equated higher

5
sales with higher profits. No one investigated the possi-
bility that the equation might be wrong. Unless correspond-
ing physical distribution costs were the same for a higher
production level -- higher sales could result in LOWER
profits! With this realization of the diseconomies of scale,

physical distribution became a recognized field.

With the invention of the computer in the early 1940's, and
its subsequent application to business logistics problems,
'modern physical distribution is more than merely producing
and distributing goods. It involves a unique analysis of
protective packaging, warehousing, inventory, various modes
of transportation, order processing, plant and warehouse
site location and customer service levels. All these things
must now be considered BEFORE a product may be efficiently
produced. Consumers are more demanding than ever before,
and although the real cost of goods is less now than 50
years ago, the consumers consistently complain of high and
unreasonable costs. The dynamics of distribution has ex-
panded so greatly that it staggers the imagination. Pro-
duction and distribution are not what they were even 25

years ago in terms of manpower, machinery output, and out-

look.

History of Packaging

 

As with transportation and shipping, packaging as a disci-
pline began around the turn of the 19th century. While man
has always relied upon containers to hold and carry objects
since the first skin bags, shells, and leaves, it has only
been recently that the package was viewed as a separate
entity, rather than as an accidental accessory, something
that was haphazardly determined and the substance forced
inside. With an inadequate and inefficient transport net-
work, there was little need to protect or display products,
for little trading of damageable articles occurred. Ship-
ments consisted primarily of bulk items such as grains and
minerals. As far back as 3000 B.C.E. packages were used as
storage for valuable articles and not for transport and

sale.

With high valued imports being brought into the colonies,
the first protective packaging containers were European
styles. However, as we became increasingly more indepen-

dent, we developed types of our own.

The early packaging materials consisted of wood, glass,
earthenware and/or textiles. Lumber was abundant and cheap,
and became a staple in the packer's world. The early world
history of packaging can be documented back to 3000 B.C.E.
for use as alabaster make-up kits, and the Persians are
purported to have used earthenware wine vessels to ship

water to Egypt after Egypt's defeat. Leather bags and

7

glass bottles were used by the Romans prior to 1 C.E.

Labeling began with the Romans, as each person identified
their product by names or initials molded in their glass
container. Paper made from rag, silk, linen or hemp fibers
was introduced in Canton, China in 105 C.E. and by the 10th
century had replaced the parchment and papyrus used since
1500 B.C.E. Prior to 1800 C.E. wood boxes employing dowels
or handmade nails were also used. With the advent of nailed

shipping crates, packaging began to emerge as a new industry.

The first type of modern shipping container, and still in
use today, is the nailed wooden box or crate. Because it
was relatively cheap and wood was abundant, little atten-
tion was paid to designing boxes for maximum strength with
'minimum.materials usage. In 1904 processes permitted the
development of wire strapping and led to wirebound closures
and in 1931 the invention of the Rock Fastener, or looped

closure, simplified and speeded up closure procedures.2

As early as 1608 packaging was organized as an industry by
Captain John Smith in Jamestown, Virginia, with the opening
of the first glass bottle factory.10 Later, Salem, Massa-
chusettes produced industrial bottles for the exporting of

New England rum and cider.

The first paper mill was established by Wm. Rittenhouse in
1690 in Germantown, Pa. and until the early 1800's the paper

was handmade from textiles and rags. Coarse papers were

8
developed from wood fibre pulp, and from these, paper pack-
aging evolved. With the emergence of corrugated and solid
fibreboard in the late 1800‘s, a cheaper form of packaging
products was developed. In 1903 the first experimental
freight shipments using corrugated and fibreboard took place
and by 1906 these materials were in general use. The use of
these lightweight, sturdy, cheap boxes promoted a phenomenal
growth pattern in the packaging industry, and also spurred

shipments of goods through lower transport costs.

The folding carton, although not used as a shipping container,
made its debut in the early 19th century primarily for l/4,
1/2, and 1 lb. quantities of foodstuffs. These boxes were
shaped by the store clerk on wooden forms and held together
with tacks or strings. The folding carton as we know it,
arrived around 1860, and was handmade in specialty shops.
The first real packaging advancement was the development of
the cracker box in 1894. The package protected the cracker
from moisture and air and it preserved the crackers flavor
and texture. The folding carton was rapidly adopted by
industry and the variations, i.e. waxed paper liners, over-

pack with an outer wrapper, etc. were soon visible.

The set up box was used in Chinese manufacturing for pack-
aging tea during the 16th century. The American set up box
industry developed in Boston in 1839 out of necessity
because long delivery delays of German set up boxes for

the jewelry trade caused sales and delivery uncertainties.

9
In 1850 the invention of hand shears and paper cutters led

to the mechanization of the set up box industry.2

Plastics have been packaging's most recent development. PVC
(Polyvinylchloride) was manufactured in 1927, PE (Polyethy-
1ene) in 1942 and PP (Polypropylene) in 1957. Rigid, semi-
rigid and flexible containers are formulated through various
methods affording good protection, permeability barriers,
style, and ease of operation. Yet, with all the conven-
iences plastics create, they are still virtually unrecog-

nized by the National Motor Freight Classification Board.

PackagingiFunctions in a Physical Distribution'Network

Very often, packaging is publicly viewed strictly in the
consumer-oriented market, and consequently little attention
is paid to the industrial package. Yet this industrial pack-
age is extremely important for, if poorly designed and awk-
wardly handled, the package itself could create ill-will
among the middlemen in the distribution channel; thus,
killing the product for the ultimate consumer. The focus

of this section centers upon the expectations of a physical

distribution manager and the packaging engineer.

Dr. Harold Raphael suggests three package functions:

1) protection

2) utility-convenience, and

3) motivation-communication12
But, within the physical distribution network, the first
two functions, protection and utility-convenience, far out-
weigh the motivational aspects of packaging. Packaging
actually performs two tasks:

1) it preserves the product contained within, and

2) it facilitates shipment
Ideally, the package will do these at an optimum.cost level.
Distribution efficiency is the key to packaging and outlines
four main ideas:

1) protects product

2) Convenient for handling and storing

3) easy to identify, and

4) provides a measure of security

10

11

Simple protection expands quickly into an entire series of

desires from the packaging engineer, the traffic manager and

the materials handling person. Considerations that must be

included are: 4

a)

b)

e)

d)

e)

f)

s)

h)

i)

J')
k)

Many of

Does the package adequately shield the
product from shock and vibration damage,
multiple frequencies encountered in piggy-
back operations, and impact/vibration/
compression damage encountered during
carrier movement or handling operations?

Will the package thwart pilferage or reduce
theft rate and loss?

Will the package contain the product during
the entire channel route, thus affording
protection to the environment as well as

to the product?

Will the package require special handling
equipment at any point throughout the
channel?

Does the package suggest a change in carrier
methods, modes?

Have carrier dimensions been considered?

Is the package appropriately labeled for
ease in shipment, storage and handling?

Does the package conserve cube, reflect the
lowest setting for damage claims, and obtain
a most favorable freight rating?

Does the package have good stacking qualities,
strength, dimension and surface properties?

Can the package be easily unitized?

Does the package consider quantity buying lots?

these requests are conflicting. For example, opti-

mum.stacking strength and conservation of cube would require

a square box -- a warehousing nightmare of tall stacks, one

upon another, and all falling while being transported by

12
fork lift. Shrink or stretch wrap palletizing may be the
solution, provided the carrier will accept the shipment,
purchasing understands the need for new materials, and so
forth. The optimum package/product requires much coopera-
tion among departments and does not need any type of
rivalry, be it to attain lowest departmental costs or the

fastest service record.

By coordinating packaging and physical distribution areas,

a lower economic total cost objective can be met. Packag-
ing can greatly reduce damage claims, and it must be contin-
ually reviewed within the context of lengthening line hauls
and channel additions. The packaging department itself
requires scientifically initiated studies and analyses of
environmental hazards within the physical distribution net-
-work, and the impact this environment will have upon the
product. The packaging department must determine, or secure
from engineering, the fragility level of the product at all

facets.

Input from the distribution department can indicate mode of
transport, special equipment available, classification rate
and packaging dictated, if applicable, handling operations
used, carrier dimensions, desired pallet configurations,
height and width, etc. Although most warehousing and
physical distribution persons prefer interlocking pallet
configurations for column stability, packaging people

prefer column stacking for package stability. Clearly,

13
compromises can be reached, possibly through computer analy-
sis of packaging-distribution problems, or through discus-
sions of the involved departmental objectives. If packaging,
physical distribution and warehousing goals can be visual-
ized and communicated, then optimal compromises can be

formulated.

Governmental Regulations

 

Regulation of private industries is relatively recent in

U. S. history. Although advisory commissions began their
investigatory activities around 1830, these committees had
no legal jurisdiction and served only in an advisory capac-
ity to the state legislatures. The Granger movement was the
prime force behind these commissions, and focused on the

many abuses perpetrated by the railroads.

The Interstate Commerce Act of 1887, and the subsequent
establishment of the Interstate Commerce Commission, recog-
nized a need for regulation of the special problems created
by the railroad transport dynasty. The highly intricate and
specialized controversies arising from railroad activities
were not meant to tie up the courtroom it was felt, and a
commission decision would better protect private enter-
prises than would the decision of a single administrator.
The ICC was also nourished by the belief that government
intervention was necessary because the free enterprise sys-
tem of competition in the field of transportation had broken
down under the monopoly of the railroads.6 Hence, the ICC
was to take the place of the competitive function by estab-
lishing reasonable and just rates, prohibiting personal
discrimination and requiring the publishing of such rates,
prohibiting undue preference, prejudice, or pooling of
freight loads, and calling for a short haul, long haul

clause.

14

15
The ICC was given the power to administer the law with
corresponding powers to investigate into the management of
common carriers (railroads), require annual preparation of
reports, as well as prescribe a uniform system of accounts
for all railroads, and finally, to order the cessation of
any violation and the giving out of penalties required by
such violations. However, from its passage when Grover
Cleveland initially departed from the idea of limited gov-
ernment, the ICC's authority grew. In 1891 Benjamin Harri-
son gave the ICC the power to require the testimony of
witnesses arising from investigations into railroad activ-
ities, and in 1906 Teddy Roosevelt awarded the ICC the
authority to prescribe maximum.rates (ceilings). By 1910,
when William H. Taft signed the Ash Pan Act, the railroads
had lost their position as the single most prominent enter—
prise, and shared the spot with the communications industry.
Taft and Congress deemed it 'necessary' to regulate the
interstate and foreign operations of the telegraph, tele-
phone and cable companies. These were assigned to fall
under the jurisdiction of the ICC, the model for the future

commissions.5

With the onset of World War I, the government took over
control of the railroads. The Transportation Act of 1920
returned ownership of the railroads to private hands; yet,
the changes that the government instituted in regulations
when returning the railroads left virtually every aspect of

the railroads operations under governmental control.

16
Although the need for the Interstate Commerce Act of 1887
was obvious because of the myriad abuses committed by the
railroads in their dealings with customers, the transpor-
tation monopoly the railroads had no longer existed at the
inception of the Motor Act of 1935, or the air regulation
in 1938, or the water regulation in 1940. The Motor Act of
1935, bringing the trucking industry under the regulation
of the ICC, did not occur because of abuses by the motor
carriers of their customers, or potential customers. Rather,
it stemmed from the theory that all competing forms of trans-
port should be regulated to preserve the "inherent advan-
tages" of each competing mode, and to further sound economic
conditions within each industry. Amended in 1958, the
Transport Act of 1940 dictated the fair and unbiased regu-
lation of each and all modes of transportation, recognition
of the "inherent advantages" of each mode, promotion of
economical, safe and efficient service for each mode, as
well as the promotion of a sound economical situation in
the transportation industry. The Act also encouraged a
system of fair wages and equitable working conditions.
Underlying the Act was the intent that the ICC would develop,

coordinate and preserve a national transportation system.19

Unfortunately, this intent has not been realized because
each agency within the ICC and CAB must protect its own
mode, thus conflicting with a national transport goal.
Economist Dr. Milton Freidman remarked that the regulators

typically become instruments of the industries they were

17

supposed to regulate.30

One of the more interesting cases that illustrates the con-
flicting goals theory and the hypothesis of instrumentality
is the Geraci case. A private carrier hauling fruits and
vegetables northward, contracted with an alcoholic beverage
company to haul his product southward, thus avoiding the
wasteful empty backhaul in both companies. Although no
other trucking firm objected to this arrangement, a com-
plaint was lodged by a competing railroad that hauled part
of the beverage firm's product. The ICC ruled in favor of
the railroad, stating that private forms are not to mix with
contract forms in view of the ‘public interest.‘ This case
decision was strengthened by the action taken in the Veon
Case, where the ICC maintains that the empty backhaul of
private carriers is one of the "inherent disadvantages" of
the carrier. Furthermore, the ICC has proposed a strict
enforcement of forbidding private carriers from.engaging in
interstate trucking. This is also done in the spirit of
promoting and protecting the public interest!28 Similarly,
a Ralph Nadar study has reported an annual addition of two
billion dollars to the freight bill because of the ICC's

rate-making policies; again, made in the public interest.19

There are four legally defined categories within each of
the five basic modes of transportation (air, pipeline,
motor, rail and water). The common carrier exists to serve

the public and is required to provide service to everyone

18
without discrimination. All rates quoted by the common
carrier must be published and adhered to. Entry into or
exit out of business of common carriers must be approved by
the Interstate Commerce Commission, upon the basis of pub-
lic interest and need, and all carriers are required to
comply with national safety regulations. Changes in rates
must also be cleared by the ICC, and the ICC has the power

to suspend rates.

The Reed-Bulwinkle Act gave the ICC immunity to anti-trust

laws in collusion or price fixing agreements.

Contract carriers may choose their customers, but are still
required to publish rates, although these rates may be
altered in actual contract. The permits to operate a con-
tract carrier are less restrictive than those for a common

carrier.

Exempt carriers, primarily haulers of agricultural products

are exactly that -- largely exempt from any regulation.

Private carriers also have no economic governmental regu-
lation, but they must be supplemental to the owners primary

source of business.

The choice of transport mode many times depends on operating
characteristics; factors other than price. In a comparative
analysis between modes, the following was shown: 29

l) availability - truck

2) frequency - truck

19
3) capability - barges (water)
4) dependability — pipeline

5) speed - depends upon total outlook

Measured output of the ICC regulated carriers vs. non-
regulated carriers shows that in cargo ton-miles, the non-
regulated trucks outcarry their regulated sisters by 82,000
millions of miles. Subsequent revenues and expenditures

are 4,890 millions of dollars greater.27

Similarly, packaging requirements for transport modes had
gone through its own history of regulations. Until the
Pridham Court case of 1914, wooden boxes were the only
legitimate way to ship packaged goods. The new variation
of wooden boxes, called corrugated and fibreboard packaging,
was berated by the lumber industry as flimsy, and unsuppor-
tive and that the corrugated board could never do as good a
job as wooden boxes. The railroads charged higher west-
east rates for these corrugated boxes originating from
California. 0n the basis of rate discrimination, Mr. Prid-
ham was awarded by the courts equal rates and thereby
opened the door to the reign of corrugated packaging, and

the demise of the wooden box.10

Within the trucking industry, certain items must be pack-
aged using explicit specifications dictated in the National
Motor Freight Classification, the daughter of the Uniform
Freight Classification. With the enactment of the Motor

Carrier Act in 1935, the motor carriers were subjected to

20
the same rate publication requirements as the railroads.
The National Motor Freight Classification is an adaptation
of the Uniform Freight Classification, and is the most
widely used throughout the United States. The establish-
ment of such a classification was primarily to meet the
competitive railroads and to fulfill the Motor Act require-
ments. Until December 31, 1971, there were two versions of

the NMFC, but Series A now has general application.

Within the body of the NMFC are various rules governing
forms, ratings, weights, shipping procedures and packaging
requirements. Specifically Items 200-297, 680, 685, 687
and 689 deal with package and container specifications.14
For the packaging engineer, a knowledge of the items and
the penalties of non-adherence should be a part of his/her
standard vernacular. In many cases, a package will be
explicitly specified with the Index to Articles of the NMFC.
Without adherence to the specified package, a company may
find itself with increased transport charges, denial of
damage claim by the carrier, or possibly an outright refusal
to accept the shipment. There are, however, legal proce-
dures for the use of a newly developed package outlined in

Item 689, Test or Experimental Shipments.

Problems within the packaging industry today are similar to
the prejudice and ignorance faced by the infant corrugated
industry in 1903. This time, however, the classification

and packaging specifications are more rigidly entrenched

21
because the ICC exists and subsequently upholds the
National Motor Freight Classification. Although headway
has been made, thinking has not changed and packaging is
still viewed as a "slap-together" operation, that is, after
careful research by many other departments, the final pro-
duct may be merely shoved into an untested (but adhering to
NMFC) package and shipped. Results: damage -- and every-
one is astonished when the product fails. The crux of the
problem is the failure of government, industry and the
private sector to recognize the packaging functions and

packaging economics.

The National Motor Freight Tariff Association of the National
Classification Committee has provided industry with approx-
imately 10,000 commodity descriptions and also described the
type of outer container acceptable for shipping. Item 689,
test shipments exists to determine "the merits of shipping
containers or loading or bracing methods, not specifically
provided for in the classification." This archaic rule

has not been changed in over 30 years. The basic provisions

of Item 689 are:32

a) The packager must request a test permit from
the chairman of the board, send a sample or
form of the proposed package, and provide a
complete description of the proposal.

b) The test permit will not be issued unless the

board determines there is sufficient* merit
in the proposal.

* Sufficient has never been defined.

22
c) The tender and acceptance by the carrier of the
test shipment is to be without prejudice to any
defense of the carriers as to the inadequacy or
form in event of loss and/or damage to the prop-
erty.

d) The originating carrier must have in his posses—
sion a copy of the test permit.

e) The delivering carrier must notify the National
Classification Board and the originating carrier
of any loss and/or damage.
f) Each package must be labeled with the test
permit number.
The basic provisions of Item 689 provide enough nuisance and
bother to deter most companies from shipping under 689 and/or
developing better industrial packaging/shipping methods.
Furthermore, if the companies developed a new shipping method,
there has been no legal precedent for acceptance for test
permit issuance. Unfortunately, the issuing of test ship-

ment permits is done in a seemingly random and haphazard

manner .

To further complicate matters, the National Classification
Board requires the results of antiquated, outmoded, and
impossible pre-testing methods to substantiate the validity
of a changed package! For example, in a personal letter,
dated October 10, 1973, to Mr. Dennis Young, Chief Engineer
of Lansmont Corporation, Robert Leonard of the NMFC stated

the following:
"RE: Shrink film (Packaging)
In view of the fact that the National Classification

Board is now considering the issuance of Test Shipment

23
Permits allowing for the shipment of canned commo-
dities in shrink wrapped trays, we offer the follow-
ing as guidelines to a preshipment laboratory/test

justification.

Package 500 of the NMFC has been the predecessor of
shrink wrap packaging and has been restricted to
truckload or mixed truckload quantities only. Today
consideration is being given to less than truckload
shipments utilizing the same shrink package but with

variations.

First of all, before a Permit will be issued, the
Board must be satisfied that the proposed package
will perform at the same level or above that of the
package being replaced (control package). A testing
procedure similar to the suggested procedure below
must be performed to simulate as closely as possible
the actual LTL environment. Tests must be performed
with both the control package and the proposed under
identical conditions with a comparative evaluation

made.

Due to the differing environments of TL versus LTL,
the provisions of Package 500, having end openings
when overwrapped and shrink with film, will not be
sufficient. Contamination and pilferage alone will

necessitate a fully enclosed package.

24
If utilizing polyethylene film, a mil thickness of
3 mil will be acceptable providing can is capped
with a molded snap on plastic over-cap. Due to the
die-cutting effect of the metal top chimes, poly—
ethylene film of 4 mil thickness should be considered -
and may be required following test results. Poly-
vinyl Chloride film if not using plastic over-cap
should be of 2 mil thickness or with plastic over-

cap, 1.5 mil.

Trays must be of complying corrugated fibreboard with
a minimum flange height of 1.5 inches as solid fibre-
board or chipboard pads or trays will not be permitted

for LTL shipments.

Procedure

 

For test purposes - 12 cases of control package

-'12 cases of proposed package

Vibration Test:

 

Six (6) of the twelve (12) cases of each must be
subjected to vibration before being subjected to
further testing. The vibration test consists of
two (2) phases:

(A) Single cases of product must be vibrated
for 30 minutes and then rotated 90' and
vibrated in the opposite plane for an
additional 30 minutes.

(B) Two (2) cases must be double tiered and
vibrated again for 30 minutes then rotated
90' and vibrated-an additional 30 minutes
in the opposite plane.

25
Vibration test conducted on a synchronous motion

vibrator calculated to achieve 1.5 G's of force.

Impact‘Test:

 

Two (2) cases of each must be subjected to 250 ver-
tical impacts of 8 inches at a frequency of 30
impacts per minute. This test conducted with both
single packages and double tiered packages to de-
termine if can chime will have a die-cutting effect

on film.

Incline Impact (Conbur):

 

Four (4) cases of each must be impacted twice on one
side and twice on one end from a distance of 4% feet

on the incline plane in the following configurations:

1. Single cases
2. Two (2) cases, one atop the other
3. Four (4) cases in a two high two wide
configuration.
Drop Test:

 

Six (6) cases of each submitted to ten 18 inch free
fall drops from a split table drop tester onto a
metal clad concrete floor. Drop sequence conducted
as follows:
1. One drop on flat bottom.
2. One drop on flat top.
3. & 4. One drop on each flat side panel.
5. & 6. One drop on each flat end panel.

26
7. One drop at a 45' angle on bottom
corner, at manufacturers' joint on
control package.

8. One drop at a 45' angle on top edge
along side panel.

9. One drop at a 45' angle on top edge
along end panel.

10. One drop at a 45' angle on a top corner.

A performance evaluation should be based on the aver-
age performance of the control package (present pack-
age) compared to the same product and unit container
in the proposed packages (shrink package). There
will undoubtedly be damage in testing as in many areas
the laboratory test will exceed the limits of normal
transportation handling. The primary purpose, how-
ever, is to evaluate the proposed with that which is
considered acceptable today, the control package.
Favorable laboratory testing results will then jus-
tify actual shipping conditions authorized under the
Test Shipment Permit program. Successful shipping
experience will warrant publication of the new pack-

age to the National Motor Freight Classification.

One additional comment - expressing strength quali-
ties of film by stating mil thickness is not reliable
today with the many resins available. When submitting
test results when applying for a Test Shipment Permit,
also specify film material properties by use of ASTM

testing methods, dart drop, tensile strength, percent

27
elongation, puncture and propagation of tear, per-
centage of shrink, MD and TD. This information is

usually available from film supplier.
If we can be any further assistance, please advise."

Now, examine the feasibility of the tests that are requested.
For instance, the impact test requires an 8 inch drop every
2 seconds. If the can rims (chime) will indeed cut through
the film, a realistic test, such as vibration on a side or
upside down will give more accurate, practical results. The
Conbur test, although still a favorite with industry, is not
an accurate gauge of railroad humping. Through the use of
more sophisticated shock testing equipment, the Conbur test
has been shown to be inaccurate and inadequate. Also, the
comparison of two packages (existing and proposed) fails to
acknowledge differences in a) freight weight, b) economic
cost of packaging materials, c) handling, loading, and
stacking characteristics, d) socio-economic factors, such

as choice of materials in an energy short environment. The
most obvious fault of these requests is that although an
existing package may meet the specified requirements, this
does not guarantee that the existing package does an ade-
quate job, nor does it allow for the correction of bad
(inefficient and inaccurate) testing procedures designated
by rules and items as old as the packages themselves. Not
only this, but there is no defined failure status. If a

good, newly developed package is forced to withstand tests

28
that do not, in fact, simulate the physical environment,
how can the results be valid for that environment? Yet
this is the accepted governmentally regulated way of deter-

mining a good package!

A sample survey conducted at the American Management Asso-
ciation Packaging Show held in New York City, April 22-25,

1974, revealed various company attitudes.

Several years ago, General Electric invested $25,000 devel-
oping a new shipping package. The damage rate differential
was approximately 5% -- a significant economic cost saver.
The NMFCB reviewed the package and decided it had not
warranted a test shipment permit. General Electric even
though it had gone through all the steps necessary to prove
the package, better than the regulation package, was denied
the test permit on arbitrary grounds! As a result, General
Electric prefers to adopt and modify existing approved

industrial packages.

Chesebrough—Pond's attitude is similar, and they also pre-

fer to use already classified packages.

The attitudes of material suppliers are slightly different,
and somewhat disturbing. Goodyear, while supplying films
and other materials, prefers to stay out of the classifica-
tion problem completely, letting the customer worry about

meeting the regulatory requirements.

29
National Testing Lab's also lets the customer carry the

legal burden.

In a letter from David Lansdale, Director of Packaging at
Scott Paper Co. he states that Scott Paper has "not applied
for any classification exception since about 1950." He
further says that they have done preliminary work, but have
never followed through, largely, because they find a package

that is already classified.

Throughout the world, great advancements in the packaging
and transportation fields have been reported and implemented.
The standardized pallet in Europe has made inter-country
shipping move quickly and efficiently. In Sweden the ship-
pers (packages) of grocery products also become the shelves,
combining the advantages of packaging and physical distribu-
tion by eliminating 'make work' by allowing one container to
be used at every point in the physical distribution channel.
Although the U.S. has seen channel development such as the
systems developed by Coca Cola, Pepsi, and L'Eggs, all.
private carriage, packaging and transportation have made
little headway as a combined discipline here. Although there
are several combined effect-causes for this, the main road-
block has been the Uniform Freight Classification and the

National Motor Freight Classification Board.

Item 689, Test Shipment Regulation of the National Motor
Freight Classification has been a detriment or deterrent

to the United States Society because:

30
a) the existence of Item 689 has stopped real
industrial packaging/transportation develop-
ment
b) Item 689 promotes unnecessary and extensive
wastage through the stoppage of innovation
by allowing the continuing acceptance and use
of packages that do not adequately perform the
packaging functions, use excessive materials
(usually corrugated board), and could easily
be replaced by lighter, more efficient materials.
By discouraging innovative practices Item 689 costs the Amer-
ican consumer money (in excessive packaging and damage),
time (in minutes and hours spent in claiming damage loss,
returning the product and so forth), and valuable leisure
hours (cost of frustration). Item 689 has caused ill feel-
ings between packagers and shippers, government and industry,

traffic department and packaging engineering department and

the public sector of our society.

Packagingias a Modal Influence

 

'With the establishment of the Consolidated Freight Classi-
fication and the subsequent National Motor Freight Classi-
fication, the packaging industry has been literally 'boxed
in' by regulations. I have previously mentioned the National
Motor Freight Classification and some of the complications
it creates, but lets look further into the NMFC. The main
purpose of this manual is to provide companies with the
applicable rate structure for their particular products.
Patterned after the railroad's own Classification, the NMFC
was designed to 1) offer a competitive structure with the
railroads and 2) to fulfill the requirements of the National
Motor Carrier Act of 1935. There are other types of classi-
fications, for example: the Coordinated Motor Freight Class-
ification for shipments in the New England area. The rate
is assigned by density, and when fragility or threat of
pilferage is high, the rate increases significantly. The
official express classification belongs to the REA (Railway
Express Agency) and is somewhat simpler than the other
classifications. REA has simple to follow rules that govern
rates, ratings, packaging, refrigeration labeling, shipping

of perishables, etc.14

The relationship of the package to the mode of shipping is
often misunderstood. For example, if a company decided to
manufacture and ship cigarettes -- here is what that ship-

ping department must contend with.32

31

32
Item ARTICLES ’LTL TL

us

47760 'CIGARETTES AND CIGARS GROUP:
Articles consist of Cigars, Cigar-
ettes, Snuff or Manufactured
Tobacco, as described in items
subject to this grouping.

 

47770 ‘ Cigarettes, tobacco, with paper wrap-
pers, see Notes, items 47772, 47774
and 47778 in boxes 25 united inches
or more, length, width and depth
added, see Note, item 47776, or Pack-
ages 895 or 1109 .................... 85 55 36.2

 

47772 NOTE - Wooden boxes must be so con-
structed, strapped or sealed as to
prevent opening and pilferage of
contents from boxes without break-
ing seals or mutilating container.
Fibre boxes must be so closed and
secured as to prevent pilferage of
contents without mutilating con-
tainer.

47774 NOTE - When on same bill of lading,
plastic cigarette cases may be in-
cluded with shipments consisting of
or including cigarettes, whether
enclosed in the same or separate
containers; the weight of the plas-
tic cigarette cases not to exceed
10 percent of the weight of the
cigarettes.

47776 NOTE - Also applies when inner con-
tainers consist of ornamental boxes.

47778 NOTE - TL shipments will also be
accepted in lift vans. Shipper to
load and consignee to unload.
Bills of lading and shipping
orders must be so endorsed and
freight bill must show that load-
ing was by shipper and unloading
by consignee.

47790 Ci ars, tobacco, see Note, item 47772,
In Boxes 30 united inches or more,
length, width and depth added, see
Note, item 47792, or in Package
795 ................................. 85 55 24.2

33
Item ARTICLES 'LTL TL MW_

47792 NOTE - Will apply only on shipments
in wooden boxes, or when cigars are
in inner containers or humidors,
fibre boxes may be used, providing
they meet the following specifica-
tions: When gross weight of box and
contents does not exceed 110 pounds,
in fibreboard boxes testing not less
than 275 pounds; when gross weight
does not exceed 120 pounds in fibre-
board boxes testing not less than
350 pounds; and when the gross weight
does not exceed 165 pounds in corru-
gated fibreboard boxes not exceeding
77 united inches, with facings not
less than .030 of an inch thick,
testing not less than 500 pounds,
provided flaps are glued throughout
the entire area of contact and box
is bound with four metal straps,
two each way, crossing on top and
bottom.

47800 Kits, cigarette making, NOT, see
Note, item 47802, in inner con-
tainers, in boxes .................. 100 55 24.2

47802 NOTE - Provisions apply only on
kits consisting of tobacco; cig-
arette paper or collapsed paper
cigarette tubes; filters; and
fibreboard boxes, folded flat;
with or without cigarette making
machines.

SPECIFICATIONS FOR NUMBERED PACKAGES

Package 795 - In solid fibreboard inner containers having
Mullen test of not less than 300 pounds en-
closed in outer corrugated fibreboard box
testing not less than 200 pounds, except that
gross weight may be increased to not exceed-
ing 100 pounds and flaps of box must be glued
and taped.

 

Package 895 - In fibre boxes made of single-wall corrugated
fibreboard facings of which are fibreboard
weighing not less than 33 pounds per 1,000
square feet, combined board testing not less
than 175 pounds, dimension limit 57 united
inches, gross weight not exceeding 42 pounds.

 

34

Package 1109 - In fibre boxes complying with all require-
ments of item 222 for boxes testing not less
than 175 pounds, except that weight may be
increased to not exceed 50 pounds and dimen-
sions must not exceed 53 united inches.

 

Any other type of packaging and the common carrier may, at
his option, refuse to accept the shipment. Any other type of
packaging and the insurance company may refuse liability
claims. As one wades through the amazing number of package
specifications there seems to be a preponderance of package
specifications utilizing only_corrugated board and kraft
paper. In many cases the use of this board is excessive and
wasteful. A prime example of this is the "F" packages for
furniture. Damage rates using these packages have been found
to exceed 50%, yet these packages still remain on the books.
In a study done at Michigan State University School of Pack-
aging, kitchen cabinets packaged by shrink wrap were found to
have significantly lower damage rates (less than 107.).31 Yet

the "F" packages are still mandatory.

Packaging can and does influence the choice of transport mode.
As in the above furniture case, the usage of common carriers
was discontinued and a private fleet was the economic solu-
tion. In other cases contract carriers are the answer.
Basically, the common carrier stands to lose much from the
antiquated packaging specifications dictated by the National

Motor Freight Classification Board.

Packaging can influence choice of mode both by affecting

commodity ratings and the rates applied. That is, ratings

35
for an assembled product may be significantly higher than
for a 2-part stacked package of the same item. If, by con—
forming with Item 222 of the NMFC the subsequent cube is
large, or the packaging expense too great, another mode that
circumvents the classification will be found.fl If the damage
rate is too high, another mode will be used. The common
carriers falling under this regulation will soon find them-
selves burdened with small volume shipments and short hauls
and other low profit items because those companies wishing
to avoid the problems created by theNMFC will revert to
contract and private carriage and, these companies, from
economic considerations, will be high volume, long haul
companies. I am not implying that the decline of common
carriers in the United States is solely caused by packag—
ing regulations, on the contrary. Packaging is just one
of the many problems facing the common carrier today. It
is also one of the easiest to alleviate, by reorganizing
the packaging regulations called for in the NMFC, or abol-

ishing them completely.

Cojgperative Interaction

 

While interviewing with many companies this past year, I
asked extensively about the interaction of the transporta-
tion/shipping departments and packaging departments. In
several companies the reply was "oh, we don't have any
communication" or "we just don't talk"! Other companies
have recognized the need for interaction and are initiating
programs designed to bring the departments closer together.
But, they are not quite sure how to do it. Coordination of
a packaging/transportations/shipping operation involves the
interaction of many marketing, cost accounting, warehousing

and inventory procedures.

There is no simple way to take the departments, merge them,
and expect instant solutions. For example: one young company,
approximately 1500 employees, has a severe problem of mul-
tiple plant and office locations in various parts of the
same city. The shipping manager has been with the company
since its birth and has always packaged items his "own way."
This generally means finding a box and stuffing it with foam
or air cap until the product doesn't rattle and then sending
it off, usually via air because of the delicate nature of
the products. Packaging documentation for shipping purposes
has been inadequate forcing the 'pack as you can' situation.
Part of the shipping Operation has been moved to a plant 20
miles from.town, and most of the shipping warehousing has
also been relocated. Another division of the company, how-

ever, retains its own shipping, warehousing and inventory

36

37

procedures. The packaging department of this company is
about 5 1/2 years old and consists of 3 people. Until
recently many segments within the company were not aware
there was a packaging department, and even if they were
aware, they were not sure of the packaging department's
function. Now, as the company begins to feel the pinch of
rising costs and materials shortages, the packaging depart-
ment has suddenly become a focal point for problem solutions.
The biggest task coordinates the packaging and shipping

operation.

Utilizing all the various skills that can be brought into
play in this type of an organizational structure, one be-
gins to realize the importance of a total systems concept
as stated earlier, not just in packaging or transportation,

but in all company operations.

One of the most important things a company can do is
recognize the potential of each department and make that

potential known throughout the company.

A packaging department can and will

1. initiate new product/package designs
2. initiate new package/shipper designs
3. revise old packaging for

a. economics

material cost too high

materials unavailable

damage loss too high

optimum material usage, maximum strength

bWNI-I

38

esthetics

l. more compatible with company image
2. marketing push for old product

shipping

1. conservation of cube

2. warehousing/inventory facilitation
3. decrease in-transit damage

4. facilitate intracompany shipments

inventory control

stacking

picking order

stock rotation

handling procedures
quantity or unitized lots

U'I-I-‘LAJNH

keep up to date on the latest changes in the pack-
aging world

a.

C.

materials

1. what suppliers can provide

2. availability of packaging materials

3. substitution of materials

4. where and how to procure needed materials
5. availability of new materials

machinery

l. locate new machinery designs that aid in
the packing operation

2. learn who provides the machines at the
lowest cost

3. determine the proper machinery for the
company and in what phase of manufacture
can they be utilized

design concepts

keep accurate watch on governmental packaging
legislation

aid in product design

a.

in the initial product design, packaging can
often play a significant role in product
formation by applying the packaging dynamics

39

of shock and vibration engineering to the
product itself rather than relying solely
on the container for protection concepts

b. packaging can be utilized as a strikingly
effective marketing tool, as exemplified
by the L'eggs pantyhose example

7. overall economics

m

materials pricing
b. quantity pricing

c. redesign of package; eliminate costly
undesirable features

d. promote sales through appearance

The company's use of their packaging department greatly
depends upon the level of managerial authority and status
alloted to the department. In the young company mentioned
above, the packaging department is treated much like an
ancillary function, and is not utilized to its full poten-

tial.

Packaging is viewed as an end result, not as a continuing
process. Testing for material verification for packaging
specifications is crude, at best. Production is not will-
ing to give up products to serve as test subjects. Although
the developed packages from.the department are good, with
the addition of adequate equipment and company respect, they

could be more than excellent.

Inter-departmental communication lines depend largely on
the respect/status level of the participants. Much time

is spent on creative thinking and innovating ideas, yet

40

without the channels to disperse the information and obtain
accurate and intelligent feedback, all creative resources are
lost. Communication flow should be a two-way system, much

as in the distributions network channel system of information.
Persons at the top of the status chain should not stifle new
innovations and redesign. Similarly, all links in the chain
must recognize each other as being a vital and significant
section, none of which rank in greater or lesser importance.

A smooth, efficiently run organization has no need for petty

status/power politics.

A transportation department can and will:

1. provide accurate ratings and rate assessments
on products

2. provide routings and services of the best trans-
port mode at the least cost

3. integrate an inventory control system

a. keep adequate supplies of properly speci-
fied shipping containers

b. order only those supplies designated by
engineering for packaging

c. keep smoothly running finished goods
inventory

4. organize and operate warehousing system

a. facility location analysis for warehousing
and storage facilities

b. rent or own decisions for warehousing

c. order picking systems within a warehouse
structure

5. aid in production scheduling

a. provide mode of transport best suited for

41

customers need, i.e. immediate, car load,
regularly scheduled orders, etc.

b. assist in developing transport schedules
to meet production time, thus eliminating
the need for valuable storage space or
eliminating unnecessary shipment delays

6. aid packaging in development of ideal shipping
package

a. provide packaging with governmental regua
lations regarding the particular product

b. provide ratings information to help deter-
mine the optimum packing configuration

c. provide details of storage environment
7. machinery

a. determine what types of materials handling
equipment can be utilized

b. coordinate machinery with packing line for
greater uniformity and accuracy in packing

8. economics
a. report all damage claims or returned damaged
products to packaging for further study and
inspection
b. report any suggestions that result in unit-
ized pallet configurations or would aid in
shipping units to packaging for possible
redesign
c. coordinate an optimum pallet configuration
computer analysis for maximum.stacking
strength and space utilization
There are many areas where transportation/shipping and
packaging overlap. In this climate of materials shortages
compounded by skyrocketing materials prices, soaring trans-
portation costs, and fuel scarcities, there exists a psycho-

logical need for similarly affected departments to band

together to meet the onslaught. Initial steps that can be

42

undertaken to coordinate the packaging/transportation depart-

ment and assuage some of the environmental indignities are:

1.

Schedule a formal meeting of the packaging

and transportation departments.’ This must

be called by high level management. Attendees
should include representatives from.marketing/
sales, production/purchasing, inventory control,
quality control, manufacturing, accounting, com-
puter analysis, and general management. Discussion
topics should include:

a. problems occuring in transit, i.e. damage,
theft, losses, etc.

b. materials shortages; procurement problems
c. production scheduling
1. when does the packaging function begin
2. when does transport function begin
d. shipping scheduling problems
e. customer service responsibilities
1. mode of transport
2. bulk or individual shipment
3. package appeal, graphics, labeling

If not already done, set up a series of shipping
carton documentation

a. Obsolete any and all packaging not speci-
fically approved By the packaging depart-
ment.

b. Have shipping notify packaging of any items
that have not been used in a 3-6 month period
for a review status. Purchasing and inven-
tory control (if separate) would be notified
if package is obsolete.

c. Review product line to determine the proper
packaging and validate that procedure by
actual packing observation.

Make certain that the level of managerial status
is equal in both packaging and transportation
departments and in a position of decision making
authority.

43
4. Alert other departments of the proposed cooperative
venture. ‘ '
5. Encourage each department to aid the other and to
ask for help whenever any difficulties arise.
A solid working relationship is desperately needed between
packaging and transportation departments all over the country.
It is only when these two functions learn that their inter-
dependence is an asset, not a liability, and begin to accept
and help one another, that we can ever hope to undo the
excessive red tape in Washington and be able to manage effi-

ciently and economically the myriad of packaging/transporta-

tion problems.

BIBLIOGRAPHY

BIBLIOGRAPHY

Single-Volume Works

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Kohlmeur, Louis M. Jr. The Regulators. New York:
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Other

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Notes Compiled from Packaging Classes, Seminars, and
Laboratories at Michigan State University during
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"National Motor Freight Classification" Issued by R. H.
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1974)

‘2'

Kc;
- 7
“C...

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‘7“5 c,