What data do you need for an accurate TCO calculation?

For an accurate TCO calculation, you need data on acquisition costs, usage frequency, maintenance costs, damage and return rates, logistics costs, and sustainability data. Looking at the purchase price alone gives a distorted picture. The true costs of a packaging solution unfold across its entire lifecycle — and that is exactly the data you need to collect. This article answers the most frequently asked questions about what data you need and how to collect it reliably.

What cost factors fall outside the purchase price of packaging?

Beyond the purchase price, costs include storage, maintenance, repair, cleaning, return logistics, administration, and eventual disposal or recycling. For industrial packaging in sectors such as high-tech, medical, or defense, these hidden cost items can together significantly exceed the initial purchase price.

A TCO calculation brings all of these items together into one complete picture. Consider the following categories that fall outside the purchase price:

• Storage and inventory management: Warehouse space, handling, and administration for managing packaging stock
• Maintenance and repair: Costs for keeping reusable packaging such as flight cases or custom racks in good condition
• Cleaning and inspections: Particularly relevant in medical and high-tech environments where clean delivery is a requirement
• Return logistics: Transportation, sorting, and processing of empty or used packaging
• Disposal costs: Processing of single-use packaging at the end of its service life
• Administrative overhead: Time and systems for tracking, compliance, and reporting

Especially in heavily regulated sectors — such as the transport of hazardous goods under ADR standards or military specifications — compliance-related costs can represent a substantial share of total packaging costs. These belong in your TCO model as well.

What usage and volume data are needed for a TCO analysis?

For a TCO analysis, you need insight into the number of shipments per year, the average turnaround time per packaging unit, the number of rotations for reusable packaging, and the geographic spread of your shipments. Without this usage data, you cannot calculate the cost per cycle.

Volume data is the foundation of any reliable TCO calculation. The more frequently a packaging unit is used, the more the initial investment is spread. Relevant usage data to collect includes:

• Annual number of shipments: Total volume of transports in which the packaging is used
• Rotation speed: How quickly a reusable packaging unit returns for its next deployment
• Average service life: Expected lifespan in years or number of cycles
• Transport distances and routes: Domestic, European, or global — this determines logistics costs
• Seasonal patterns and peak volumes: Fluctuations that affect inventory requirements and storage costs
• Number of locations: How many sites or customers receive or return packaging

Companies such as ASML or Philips, which transport sensitive components worldwide, deal with complex return flows and varying volumes. For them, accurate usage data is not a luxury — it is a necessity for keeping the TCO calculation realistic.

How do damage and return rates affect the TCO calculation?

Damage and return rates directly affect the TCO calculation through two channels: the cost of damaged products and the cost of processing returns. High damage rates significantly increase total packaging costs, even when the packaging itself was inexpensive.

Packaging that looks cheap but fails regularly is, in reality, costly. Relevant damage figures for your TCO model include:

• Damage rate per shipment: What percentage of transports result in damaged products
• Average damage cost per incident: Repair, replacement, or redelivery of the damaged product
• Return frequency: How often packaging is sent back and what that costs each time
• Return packaging processing costs: Inspection, cleaning, repair, or replacement
• Failure rate: What proportion of reusable packaging fails prematurely due to wear or damage

For sectors working with expensive or sensitive equipment — such as medical technology or defense materiel — this is especially critical. A single damaged shipment can exceed the costs of hundreds of problem-free transports. Failing to include this in the TCO calculation means underestimating the true cost of a cheaper packaging solution.

What is the difference between single-use and reusable packaging in a TCO model?

In a TCO model, the cost structure differs fundamentally: single-use packaging has low per-unit acquisition costs but high cumulative costs at large volumes, while reusable packaging requires a higher initial investment but the cost per use decreases significantly as the number of cycles increases.

Single-use packaging in the TCO model

With single-use packaging, variable costs dominate. You pay for materials again with each shipment, and disposal costs are added on top. At high volumes or frequent shipments, these costs accumulate quickly. Waste processing also brings additional costs, particularly when working with regulated materials.

Reusable packaging in the TCO model

Reusable packaging requires a higher initial investment, but the cost per cycle decreases as the packaging is used more frequently. Relevant data for the TCO model includes the expected service life, number of rotations, maintenance requirements, and residual value at the end of the lifecycle. With a high rotation speed and long service life, the TCO of reusable packaging is generally lower than that of single-use alternatives.

The break-even point — the moment at which reusable packaging becomes cheaper than single-use — is a key output of a well-constructed TCO calculation. That break-even point varies by situation and depends on volume, transport frequency, and maintenance costs.

What sustainability data belongs in a TCO calculation?

Sustainability data that belongs in a TCO calculation includes CO2 emissions per packaging cycle, material usage and reuse rates, energy consumption in production and transport, and waste streams including recycling costs or revenues.

Sustainability is not just an ethical choice — it has direct financial consequences. Consider:

• Carbon costs: A growing number of companies are required to internally price their emissions or account for them to clients and regulators
• Material consumption: How much raw material does the packaging solution consume per year, and what does that cost
• Recycling revenues or costs: Some materials yield a return when collected; others incur costs during processing
• Reuse rate: What proportion of packaging is actually reused versus discarded
• Production impact: Energy consumption and emissions from producing new packaging versus maintaining existing packaging

Circular packaging principles — where packaging is designed for reuse, repair, and recycling — reduce both the environmental impact and total costs over time. Including sustainability data in the TCO calculation makes those benefits visible and measurable.

How do you collect reliable data for an accurate TCO calculation?

You collect reliable data for a TCO calculation by combining internal data sources: logistics systems, ERP data, damage reports, and procurement records. Supplementing this with data from your packaging supplier on service life, maintenance requirements, and rotation speed completes the model.

In practice, data is often spread across multiple departments. A structured approach helps:

1. Inventory existing data sources: Which systems already record relevant data, such as ERP, WMS, or transport management software
2. Establish proper damage registration: Ensure that damage incidents are consistently recorded by packaging type and transport route
3. Request supplier data: Technical specifications, expected service life, and maintenance instructions from your packaging supplier
4. Use digital tracking: Tools that monitor the rotation and status of reusable packaging significantly improve data quality
5. Establish a baseline measurement: If historical data is unavailable, start with a controlled pilot period to collect baseline data

A common mistake is working with assumptions rather than measured data. Estimates of damage rates or return costs can significantly skew the outcome of a TCO calculation. The more you work with actual figures from your own operations, the more reliable the model.

How Faes supports a complete TCO calculation for your packaging

A TCO calculation is only as good as the data it is based on — and collecting that data is, in practice, the greatest challenge. Faes supports you as a full-service packaging partner that does not stop at delivering a packaging solution, but manages and provides visibility into the entire process.

Through Packaging Management by Faes, you gain access to a complete end-to-end approach that systematically collects and makes available all the data required for a TCO calculation:

• Advanced inventory management: Real-time insight into the number of available packaging units, rotation speed, and utilization rate
• Return logistics: Structured processing of returned packaging, including registration of condition, repair needs, and failure rates
• Maintenance and repair: Professional maintenance of reusable packaging with tracking of maintenance history and costs per unit
• Digital tools: PackAssist and StackAssist support the optimization of packaging choices and the calculation of the most efficient solution
• Compliance expertise: In-depth knowledge of UN, NEN, and MIL-STAN standards, ensuring that regulatory costs are correctly included
• Sustainability reporting: Insight into material usage, reuse rates, and CO2 impact as part of the total cost analysis

Whether you operate in the high-tech sector, the medical industry, or defense, Faes provides the data, the expertise, and the infrastructure to produce a TCO calculation that holds up. Want to know what your packaging process truly costs and where the greatest savings lie? Contact Faes for a no-obligation conversation about your situation.