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Regulating parcel overpacking / Enforcement crackdown on parcel overpacking set to begin April 30, with two-year moratorium

Enforcement crackdown on parcel overpacking set to begin April 30, with two-year moratorium

Ice pack space excluded, small businesses not regulated

2024/04

The Ministry of Environment (MOE) will enforce the overpacking regulation on April 30 as scheduled, but will not crack down on it for a two-year transition period. It will also significantly increase the number of exemptions, including small and medium-sized enterprises.

The overpacking regulation requires that disposable packaging used to transport products to consumers must be packaged once or less, and the packaging space ratio must be 50% or less. It is estimated that about 1.32 million distributors and more than 10 million product types will be subject to the provisional regulation, and person-to-person transactions and overseas direct sales are not subject to the regulation.

The 'Rules on Standards for Product Packaging Materials and Packaging Methods' was revised on April 30 last year and will be enforced from April 30 this year.

However, the industry has expressed difficulties ahead of the implementation. Currently, various products are transported in about 10 different types of packaging materials, prioritizing economy and efficiency, and to comply with the standards, they will need to increase the number of packaging materials and secure more loading sites. In particular, it is necessary to hire additional manpower and consider that improving the packaging and logistics system requires considerable time and investment.

They also requested the Ministry of Environment to recognize exceptions for cases where it is difficult to comply with the standards, and to come up with reasonable measures to ease the burden on small and medium-sized companies that do not have a large volume of parcel delivery.

Exclusion of recovered reusable packaging from the regulation

In response, the Ministry of Environment (MOE) considered the excessive number of regulated companies and products, the limitations of applying uniform regulations, and the possibility of passing on regulatory costs to consumers, and came up with a plan that can work practically in the field.

Accordingly, in order to give the industry time to prepare and implement measures to improve packaging methods based on the enforcement standards, the regulation on oversized packaging for parcel delivery will be enforced from April 30, but will be operated for a transitional period of two years.

In addition, companies with annual sales of less than 50 billion won will be excluded from the regulation.

According to a survey of the volume of courier services handled by the size of the e-commerce companies, the top 10 companies accounted for about 40% of the domestic courier services, indicating that the market share of large companies is very high. On the other hand, it is estimated that less than 10% of the parcel delivery volume is handled by companies with annual sales of less than 50 billion won.

Therefore, the Ministry of Environment plans to exclude companies with annual sales of less than 50 billion won from regulation to efficiently manage the field while relieving the burden on small and medium-sized companies, but actively encourage large companies to voluntarily reduce packaging materials.

In addition, insulation materials that are packaged together to protect the quality of the product are included in the product to calculate the packaging space ratio, and plastic bags used to seal the insulation material and the product are not included in the packaging count. In addition, if packaging materials are recovered and reused, or if they are gift-wrapped at the request of consumers, the number of packages or the packaging space ratio will not be applied.

“We will reduce transportation packaging based on industry autonomy and government support rather than uniform regulations,” said Han Hwa-jin, Minister of Environment, ”and we will communicate with the industry with reasonable policies that take into account local conditions.”

Optimized box delivery technology that fits the size of the product is in the spotlight

As the overpacking regulation has been implemented in earnest, there has been growing interest in technologies that reduce the empty space in parcel boxes. In other words, a technology that utilizes 3D technology to supply boxes according to the size of the product is gaining attention.

CJ Logistics is introducing its own 3D simulation-based box recommendation system, “Royce Opak,” to its logistics centers. It is a system that recommends the optimal size box for a customer's order through a 3D simulation-based loading algorithm.

The 3D simulation-based loading algorithm works by simultaneously considering the size and loading direction according to the volume information of each product entered in advance and deriving optimal results through repeated simulations.

CJ Logistics has seen a significant decrease in the average packing space ratio of its parcel boxes as a result of the introduction of Royce Opac. In the case of logistics centers optimized with the Royce Opac system, the packing space ratio was reduced by an average of 36% for pure goods alone, excluding cushioning materials.

CJ Logistics plans to introduce the system to all of its new centers in the future, in addition to the 15 logistics centers currently in use. In the second half of the year, CJ Logistics will also expand the system to allow customers to utilize the box recommendation function directly. Through the system, customers will be able to recommend the appropriate size of boxes based on the volume information of their products, or receive suggestions for box specifications to be introduced in their logistics centers.

Solvers provides automated packaging equipment that packs boxes without empty space.

When a worker scans a product and places it on the inlet, the 3D camera automatically scans the product and cuts the cardboard according to the length, width, height, etc. to create a box that fits the size of the product. This eliminates the need for fillers such as paper or bubble wrap.

Solvers has various packaging automation facilities such as CartonLab System, Genesis, and CartonLab Duo, which can automatically combine multiple products as well as single products.

In addition, it also supplies a BOD system that produces customized boxes, although it is not fully automatic. When a worker places a product on a scan pack that scans the volume of the product, the box is automatically made, and when the worker places the product in the box, the packaging is completed. The advantage is that it can also pack bulky or uniquely shaped atypical products such as furniture.

“We believe that the customized box packaging system supplied by Solvers can be an alternative to the regulation of overpacking by couriers,” said Hee-soo Ha, managing director of Solvers.