Introduction
An intermediate bulk container (IBC) is a packaging container that is pallet mounted, an industrial-grade container used to store and transport bulk liquids and powders. The IBCs can be categorized into three types that are rigid, folding, and flexible. These containers are “intermediate” containers based on their storage volumes between a tank and drums. The two most common volumes of the rigid IBC are 275 gallons and 330 gallons.
IBCs are most commonly used for transportation and storage of products such as:
• Chemicals
• Solvents
• Pharmaceuticals
• Liquids
• Food ingredients
• Sand
• Grains
Some of the areas where IBC has been used very rarely but uniquely are the storage of aquaponics, general bulk storage, and the collecting of rainwater for drinking or harvesting.
The outbreak of COVID-19 has resulted in a transition of the economy in a big way. One such shift is towards a circular economy, where the value of products, materials, and resources is maintained for as long as possible, minimizing waste generation. On account of their purpose to contain consumable goods, packaging items are particularly prone to reuse. IBC is one such material whose recycling and reuse had gained momentum, especially post COVID-19 when the entire world faced a shortage of supply and supply materials. Europe is the first region to take the initiative to produce re-usable and recyclable IBCs and curb the demand for plastic as a raw material in the manufacturing of IBC. IBC’s reuse in Italy is promoted by Conai, the Italian National Packaging Consortium, due to a special agreement between Conai and the IBCs reconditioners.
Global Impact
Due to COVID-19, the entire packaging industry has suffered a shortage of basic chemical raw materials supply. Some of them are wood, plastic, and chemicals. Many raw materials are not available, and if available, they cannot be transported. Also, the few materials that are still available are far more expensive than they are usually.
The extreme depletion in the raw materials market has hit the chemical and packaging industry very hard. IBC, in which plastic and steel play a major role, is also affected by the price hike and unavailability of materials. In the last one-year, important plastics such as polyethylene or polyurethane have become 35% and 50% more expensive. This has also affected the companies that rely on petrochemicals and their downstream products, such as IBC containers.
Impact On Demand
The demand for IBCs has gone down during the pandemic. Various companies that use IBCs for their supply chain have faced lockdown and thus, did not require IBCs for a very long duration. Around 80% of their IBCs were unused during the pandemic. However, as the government of various industries loosened the restrictions, a sudden surge in demand for chemicals has been noticed, especially from China and the U.S. To cater to this demand, manufacturers needed IBCs for supply management. Many financially strong overseas buyers are now contributing to fewer raw materials available for German and European countries.
There has been a drastic change in the market of IBC post-COVID-19. Now the situation is such that players are facing raw material scarcity to produce IBCs. The major reason behind this shortage is the lockdown imposed in the countries. The supply chains of the plastics industry span the entire globe and consist of finely tuned, interdependent links. The global lockdown disrupted supply chains in many places. Ships remained in ports, and goods piled up in container sheds – this continues to cause unusual fluctuations in supply and demand long after the first severe lockdown.
Another reason for the shortage is force majeure events that disrupt raw material supply chains due to acts of nature beyond control. These include weather phenomena such as winter storms in the USA and the blockage of the Suez Canal by a container ship.
IMPACT OF RAW MATERIAL SCARCITY ON THE IBC INDUSTRY
More than 70% of the plastic companies that manufacture packaging materials such as IBCs have complained of inadequate supplies of primary products such as plastic granules in the first half of 2021. The challenge is still prevailing in the industry. This has led to the increased number of challenges for the packaging companies, such as:
• Orders have to be postponed or canceled
• Longer delivery time
• Reduced profit margins for companies
Many packaging companies currently see an extreme shortage of intermediate bulk containers because delivery routes have become longer and increasingly complicated. Bottlenecks have to be overcome, and detours have to be accepted.
LAUNCH OF SMART IBC FLEET
The industry has increased its IBC fleets to react in a more agile manner. But due to the limited IBC manufacturer of IBCs, this step is either not possible. If people opt for it, it will be costly due to the high material costs for plastics, which causes the prices for IBCs to rise sharply. However, these additional costs cannot or do not want to be borne by financially struggling companies in the industry.
This is where companies decided to launch digitalized IBC fleet. The benefits of these fleets are:
• Improved inventory and customer management
• Reduced investments in New IBCs
• Higher agility through process efficiency
Companies that reply on IBCs losing control of their supply chains and inventories can disappoint customers and barely act. Companies have started putting small sensors attached to an IBC container and installed in just a few steps. It measures relevant parameters such as fill level, location, and temperature and uses this data to create a digital twin of the IBC container in the web application. This virtual container of the real physical container allows the users to access their packaging from anywhere – whether for planning purposes or to track the current status. Instead of unclear relationships, users get full control and transparency over their connected IBC fleet.
Conclusion
The impact of COVID-19 has been severe in almost every industry, but the packaging industry has proven to be robust throughout. Many packaging companies have had to invest heavily in new technology and software to switch to online work and online business. Even after the end of this pandemic, this trend is going to continue. A digital setup for the packaging industry will be stronger than ever.
During the COVID-19 spread, IBCs had played an important role in maintaining the supply chain even when the supply of raw materials was very restricted. At the same time, however, the demand for protective packaging increased as the world moved online, became more remote, and required more protective packaging to ship goods and products.
IBC companies have managed the challenge of increasing demand while dealing with a shortfall of resources and disruptions in the supply chain. Many of the U.K.’s most essential industries relied on it, as PPE needed to be safely delivered during the pandemic, supermarket shelves needed to stay fully stocked, and important industries from tech to construction needed supplying.
However, COVID-19 forced many parts of the supply chain to close down overnight, either through business closures, lockdowns, or the need for workers to self-isolate after testing positive for the virus. The recycling industry, which supplies the materials for plastic packaging, was severely disrupted. This has led to the launch of smart IBCs. It is expected that the market players will well accept these even in the upcoming future.
