Calculating the total cost of industrial packaging involves more than just the purchase price. You need to take into account material costs, production costs, transport costs, but also less visible aspects such as maintenance, reuse and sustainability. By adopting a Total Cost of Ownership (TCO) approach, you gain insight into the actual costs over the entire life cycle of your packaging solution. This article helps you to identify all cost components and make a realistic calculation for 2025.
The total cost of industrial packaging consists of direct and indirect components that together determine the actual investment. The direct costs are the most visible: material costs (wood, metal, plastic, foam), production costs (labour, machinery), and transport costs for the delivery of the packaging.
In addition to these visible costs, there are also less obvious cost components:
Many companies underestimate these hidden costs, even though they can have a significant impact on the overall picture. For example, cheaper packaging that wears out faster or offers less protection can lead to higher costs in the long run due to product damage or the need for replacement.
For sectors such as defence, medical or high-tech, there are additional specific costs for certifications, clean room packaging or special protection requirements. These costs are directly linked to the norms and standards that apply in these sectors, such as MIL-STAN or UN certifications.
Total Cost of Ownership (TCO) gives you insight into the actual costs of a packaging solution throughout its entire life cycle. This approach helps you look beyond the initial purchase price and allows for a fairer comparison between different options.
To calculate the TCO of industrial packaging, follow these steps:
A simple formula for TCO calculation is:
TCO = Purchase cost + (Operating cost × Number of usage cycles) + Maintenance cost + End-of-life cost
Let’s illustrate this with an example:
| Cost component | Standard packaging | Premium packaging |
|---|---|---|
| Purchase costs | €500 | €1.200 |
| Operating costs per cycle | €20 | €15 |
| Service life (operating cycles) | 25 | 100 |
| Total maintenance costs | €200 | €300 |
| End-of-life costs | €50 | residual value |
| TCO | €1.250 | €1.900 |
|
TCO per use |
€50 | €19 |
Although the premium packaging requires a higher initial investment, the TCO per use is significantly lower due to the longer service life, lower usage costs and residual value at the end of the life cycle.
For a more accurate calculation, you should also take into account the time value of money (net present value) and any risks such as product damage or delays in the supply chain.
Sustainable packaging solutions often have a higher purchase price, but can actually save costs in the long term. The impact on your total costs depends on various factors.
Advantages of sustainable packaging materials that influence costs:
The cost impact varies depending on the type of sustainable solution:
Circular packaging is designed for reuse, repair and recycling. The initial costs are on average 30-50% higher than traditional alternatives, but the TCO can be up to 60% lower with intensive use. This is because the costs are spread over multiple usage cycles.
Biobased materials such as PLA or mycelium may be comparable in price to traditional plastics, but offer advantages in terms of waste processing. The cost savings here are mainly in the end-of-life phase.
Recycled materials are often cheaper than virgin materials, but may have limitations in terms of strength or application possibilities. The cost savings are usually between 5-15% on material costs.
When conducting a cost-benefit analysis, it is important to look beyond the purchase price alone. Take reusable transport packaging, for example: the higher initial investment is recouped through fewer replacement purchases, lower waste costs and better product protection.
We expect several trends to influence industrial packaging prices in 2025. These developments are important to consider in your budget planning and TCO calculations.
The most important factors that will determine prices in 2025:
Raw material prices will remain volatile. The prices of wood, metal and plastic have fluctuated significantly in recent years. For 2025, we expect a moderate increase of 3-5% for traditional materials, while bio-based alternatives may actually fall in price due to economies of scale and technological advances.
Labour costs will continue to rise, particularly in Western Europe. This will have a direct impact on labour-intensive packaging products such as customised flight cases and wooden crates. The expected increase is between 4-7% compared to 2023.
Technological innovations such as automated production processes, 3D printing and smarter design software can reduce production costs. Companies that invest in these technologies may be able to keep their prices stable despite rising raw material and labour costs.
Sustainability regulations are having an increasing influence on packaging choices. The expected tightening of EU regulations on packaging waste and recycling will make non-sustainable options more expensive due to levies and fines. This creates an additional financial incentive for sustainable alternatives.
Supply chain optimisation remains an important cost driver. Smart packaging solutions that increase transport efficiency and reduce product damage will become more attractive as transport costs rise.
For specific industrial packaging types, we expect the following price developments in 2025:
By integrating these trends into your TCO calculations in a timely manner, you can make informed decisions about your packaging strategy for the coming years.
Calculating the total cost of industrial packaging requires a broader view than just the purchase price. By identifying all cost components and adopting a TCO approach, you can make better decisions that are cost-effective in the long term.
The shift towards more sustainable packaging solutions offers opportunities to not only reduce your ecological footprint, but also to save costs over the entire life cycle. With the expected price developments for 2025 in mind, now is the time to evaluate your packaging strategy.
At Faes, we understand that every sector and every product presents unique challenges. By thinking about the right packaging solution early in the process, we can work together to create packaging that not only optimally protects your products, but also contributes to a more efficient and sustainable supply chain.
The optimal lifespan depends on your specific use and supply chain. Analyse how often your packaging is used, under what conditions it is used (temperature, humidity, handling), and what the costs are for replacement versus maintenance. Perform a break-even analysis in which you compare the initial investment with the savings per usage cycle. For high-value products or frequent shipments, a longer service life is usually more economical.
Effective KPIs for packaging strategies include: product damage rate, total packaging costs as a percentage of product value, average number of usage cycles per package, handling time per package, storage space required for packaging, and CO2 emissions per shipment. By measuring these indicators regularly, you can identify opportunities for improvement and demonstrate the ROI of your packaging investments.
Utilise existing transport flows where possible, such as suppliers taking empty packaging with them when making new deliveries. Consider pooling systems where packaging is shared between different users. Invest in foldable or nestable packaging to minimise return volume. Implement a track & trace system to prevent loss. Carefully calculate whether the return costs outweigh the savings from reuse versus single-use packaging.
