In our first post in the series, we took a look at why cycle count, not unit price, is the best way to calculate container value. Then we followed up with a deep dive into some cost considerations that don’t show up on your container purchase orders.
Now, in this third and final post in the series, we’re turning the total-cost-of-ownership (TCO) lens to one of the most common objections we hear from operations that are still running single-use packaging:
“The price of oil is too high to make the switch right now.”
It’s a valid concern. One that affects all durable goods manufacturers. But it has an especially big impact on the automotive sector, where manufacturers are already managing significant freight cost volatility.
The fact is that when oil prices spike, resin prices follow, leaving procurement teams with an unpredictable variable that can disrupt budget planning. That uncertainty often drives cost-driven operations to delay the switch to reusable packaging. But that’s a mistake that can end up costing you a lot more in the long run.
Who’s Still Using Corrugated in Automotive?
The automotive industry has all but eliminated corrugated packaging from OEM/supplier flows. But single-use corrugated still persists in the last mile of most automotive supply chains: aftermarket parts distribution.
The reason is simple. With no OEM engineering sign-off or cost reimbursements in place, suppliers often default to the cheapest possible distribution option. On the surface, that approach points to corrugated. But take a closer look, and you get a much different picture.
Examining The Oil Price Objection
For discretionary buyers, the objection feels logical. Why capitalize now when the price of resin is high?
The biggest blind spot here is that the cost of corrugated also moves with oil prices. It’s not as direct or immediate, but the impact is real. Energy cost fluctuations affect mill operations. Freight surcharges affect delivery costs. At the end of the day, pulp pricing is subject to the same economic forces as resin.
When the price of oil rises, the cost of both single-use corrugated and reusable injection-molded packaging follows. But there is one critical difference in these cost trajectories. The reusable container that you purchase once absorbs that volatility and spreads it across 300+ cycles. The corrugated buyer, on the other hand, pays the price of that volatility on every single delivery.
The Wait Is Never Worth It
As we established in the first post of our container TCO series, the key metric in any container TCO analysis is cost-per-cycle, not unit price. A reusable container that’s capitalized over a six-year service life (and 300-plus cycles) delivers a fraction of the per-cycle cost of corrugated.
That math doesn’t improve while you wait for oil prices to drop. The savings equation just starts later. Every cycle run in corrugated during the delay is a cycle that isn’t building ROI on your capital container investment. And in high-velocity aftermarket distribution, those costs add up fast.
The automotive industry has already found a working answer to resin price volatility. Rather than treating price spikes as a stop sign, high-volume operations index container pricing to a published resin benchmark. That allows both parties to adjust prices periodically as markets move, instead of deferring fleet needs when prices spike. The packaging keeps running. The cost recovery keeps building.
The operations that win on container cost don’t try to time the resin market. They start the cost recovery clock sooner and let the cycle count do the work.
Ready to make the switch to reusable containers in your automotive or durable goods distribution network? Talk with one of our reusable transport packaging experts today.
