Protectionism or protection?

Protectionism (n): ‘the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies.’ (Wikipedia).

As global economies continue to shrink, some business leaders and politicians are making political capital by proposing measures to protect their industries and countries from external influences. It is probably true that this behaviour can be found in most of us. Fearful of loss, we tend to batten down the hatches, keep our heads below the parapet and wait for the storm to pass.

However, a global economic theory proposes that people will all do better if they specialise at what they do best, instead of being self-sufficient. This implies that the external influences that politicians are trying to avoid are necessary to healthy trade. If we accept that protectionism will result in damage to a country’s economy in the long-term – history is littered with examples – then we need to be more global in our outlook and be prepared to face up to these challenges.

Protection (n): ‘the action of protecting or condition of being protected; shelter, refuge, cover, safety or care.’ (Chambers)

For free trade to work and thrive, products manufactured in one part of the world need to be distributed to another, and this is where the major functions of packaging to contain, protect and preserve come into their own.

Almost every manufactured product consumed by humans spends some time in a container. Although shipping containers have their origins in the late 18th century, the global standardisation of containers and container-handling equipment has been one of the important innovations in 20th century logistics. In 1972, the world container fleet was estimated at 1mn teu (container capacity is expressed in 20ft. equivalent units); in 2007 it had risen to 25mn teu. There are ships like the Emma Maersk, over 470m long and 60m wide, which can carry over 14,500 containers. Container ports like Felixstowe handle around 3.75mn teu per year, which is dwarfed by the ports of Singapore and Shanghai annually handling around 55mn teu per year between them.

Containers then are the corpuscles of the global distribution supply chain, carrying the oxygen of the trade we need to survive. Around 10,000 containers are lost at sea each year but, more pertinently for the packaging industry, damage to the contents of containers runs into hundreds of millions of dollars per year. The cost of damage caused by poor or inadequate packaging is inexcusable and needs a little forethought and planning.

Understanding the hazards faced goes a long way to reducing the damage to goods. Appropriate packaging reduces wastage and costly (and perhaps irreparable) damage to the goods being packed. Simultaneously, correctly-specified packaging materials and formats, related directly to the demands of the goods, will ensure that excessive costs are not incurred, i.e. the goods are not over-packaged to provide protection against non-existent hazards.

Good packaging solutions also have the potential to reduce the total cost of moving goods, providing safe, convenient handling systems and possibly reducing size and weight. The cost of packaging must be related to the product’s value, image and end-use. For most manufacturers, this means the minimum spend must be commensurate with meeting all the required functions of packaging. This is not the same as the lowest cost option. If a product fails to attract the attention of the consumer, due to poor packaging presentation, the packaging is not achieving its required functions.

The role of good packaging is critical to good logistics. So how can you ensure the use of the right packaging to contain, protect and preserve the product? Consider the complete distribution chain and work out the likely areas where damage could occur. Decide what packaging you are going to use and then test it. There may be a cost to prove your package will survive, but getting it wrong could cost you far more, not merely in cost, but in terms of reputation and customer relationships.

Protectionism or protection – the choice is yours.