Pallet pooling and returnable packaging transformed with IoT

pallet pooling returnable packaging
Photo courtesy Loscam

Loscam, Asia-Pacific’s largest pallet pooling and returnable packaging provider, is transforming its operations using an IoT track-and-trace solution from the Asia-Pacific Sigfox operator Thinxtra.

Founded in 1942, Loscam supports retail and manufacturing supply chains with leasable pallets and returnable packaging solutions. It’s Asia-Pacific’s largest pallet pooling and returnable packaging solutions company, with over 100 depots operating across the region, serving thousands of customers.

Its customers pay a daily hire rate for returnable packaging assets to move inventory via a third-party logistics provider between manufacture and retail. Customers are also required to pay a daily compensation rate to cover replacement of missing assets.

“A key pitfall in our environment is that we can’t easily track assets leased to customers. When assets go missing, customers often resist paying compensation because they feel they’ve already paid for the asset by hiring it,” says Daniel Bennett, EVP for Australia and New Zealand, Loscam. “The challenges for us of not tracking assets are unhappy customers, lost compensation fees and replacement costs.”

The lose-lose-lose of unhappy customers, lost compensation fees and replacement costs was a major problem for the company, who tried to solve it over the years with a range of different asset management solutions using a wide variety of technologies. For example, ten years ago it trialled a 3G GPS tracker solution. The solution did enable customers to track stillage units, but the costs were prohibitive for widespread application, the need to recharge batteries weekly was not operationally viable and the business case did not stack up.  It also tried an RFID solution for asset tracking, but the ‘scan in, scan out’ approach couldn’t offer end-to-end, real-time visibility to an asset’s location and was too cumbersome to deploy across a large customer base. Finally, it decided to try a solution from Thinxtra, the 0G network operator for Australia, New Zealand, Hong Kong and Macau.

Within four months, Loscam’s new intelligent IoT solution had transformed the triple negative problem of lost pallets by improving visibility of assets and reducing losses. This translated into a win-win-win of better customer experience, lower asset replacement costs and increased operational efficiency.

“When Thinxtra’s IoT solutions arrived, the overall costs of connectivity, hardware and deployment became feasible. The devices were getting smarter too, particularly for extending battery life to years instead of months,” says Bunnett.

An early example saw the solution tracking inventory moving between Sydney and Melbourne, a distance of around 700 kilometres or 400 miles. The solution captured unexpected extra value from the sensor data, which made the business case even more compelling for the customer than tracking location alone. On one occasion, it alerted the customer that the temperature of the goods was declining. The customer knew the exact vehicle location, so the logistics provider was able to contact the driver directly. It was discovered the goods had been mistakenly loaded onto a refrigerated truck. The logistics provider shifted the inventory to the correct truck, salvaged the goods and completed the delivery.

“The first IoT-enabled Track and Trace deployment was a lightbulb moment for us. We knew tracking the location of our returnable packaging solutions was important but suddenly realised that tracking other data generated by the device could add enormous extra value to our customers. That put us on the path to make IoT-enabled tracking work for our business on a larger scale,” says Bunnett.

Loscam moved beyond live location tracking to explore different types of data that would be useful to customers, including alarms linked to temperature, humidity, whether units were open or closed, and geo-fencing to enable notification of arrival.

Another early example of the success of Loscam’s solution was with a high value automobile spare parts provider. It fitted 220 pallets used to ship spare parts to dealerships around Australia with Thinxtra’s smart tracking solution. Within four months of the tracking devices being fitted, the solution had revealed that 5% of units were incorrectly delivered to a competitor’s warehouse, 8% moved outside the customer’s logistics provider network and 1% were mistakenly shipped to a location where the customer didn’t have a dealership. By quickly recovering the missing units, the customer saved compensation fees and reduced the total number of units leased from Loscam by 25% because smart tracking allowed them to use leased units more efficiently.

“All our customers have different needs. Our returnable packaging solutions hold inventory ranging from car parts to frozen goods, paint cans and more. We needed a partner who could work with us to create a scalable IoT solution to enable fact-based actions for customers, whether tracking location, temperature, humidity or something else, on a robust, low-cost national network. Thinxtra created that for us. We’re excited by the future of what IoT can do for our business,” says Bunnett.

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