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400Module 5 of 6

Cost Modeling for Packaging

Yield calculations, waste allowances, finish surcharges, and landed cost analysis.

6 minutes
cost
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Lesson Video
Cost Modeling for Packaging
Module Content

1. Executive Summary

The 7 most important insights
  1. Yield math is standards-anchored. ISO 536 (paper/board grammage) and film thickness+density (ISO 4593/ASTM D6988) convert to gsm and m²/kg. For films: gsm = density[g/cm³] × thickness[µm]; yield = 1000/gsm. [1][2][3]
  2. Waste is fixed make-ready + proportional running. Separate a fixed sheet/footage allowance from a % running allowance by process, sides, and finishing passes. Capture supplier-specific allowances empirically. Evidence gap: no single current cross-process norm. [4][5]
  3. Finishing surcharges = extra pass + tooling + register risk. Hot foil/emboss requires dies (material-dependent life), may need multiple passes, and imposes artwork constraints. [6]
  4. Landed cost is Incoterms-dependent. Duty/VAT/fees bases differ by term; CIP requires higher insurance cover than CIF. [7]
  5. Border fees are regional. US adds MPF (ad valorem, min/max) and HMF 0.125% (ocean). UK/EU: import VAT per customs valuation; no MPF/HMF equivalents. [8][9][10]
  6. EPR & plastic taxes change unit economics. UK EPR base fees (2025) by material; UK PPT £225.66/t (2025/26) if <30% PCR. [11][12]
  7. EU PPWR phases in after ~18 months (mid‑2026). Expect harmonized recyclability/labeling to affect cost via modulation and constraints. [13]
5 recommended actions
  • Standardize yield calculators (ISO 536; ISO 4593/ASTM D6988) with locked units (µm, g/cm³, gsm). [1][2][3]
  • Require explicit waste allowances in quotes and store actuals per press/plant. [4]
  • Break out finishing surcharges by pass count, die type/size, register, coverage %, and speed. [6]
  • Make Incoterms mandatory in RFQs; model duty/VAT/fees accordingly (US MPF/HMF; UK/EU valuation + VAT). [7][8][9][10]
  • Add EPR/PPT lines now (UK 2025 fees, PPT rate). Prepare for PPWR modulation. [11][12][13]
Key risks (12–24 months)
  • EU PPWR application window (~Aug 2026) — design and fee modulation rules harden. [13]
  • UK RAM modulation (from 2026) — recyclability grades impact fees. [11]
  • Border/freight volatility — keep calculators parameterized and source rates live.

2. Definitions & Concepts

  • Grammage (gsm): mass per unit area of paper/board (ISO 536). [1]
  • Thickness (films): ISO 4593 / ASTM D6988; with density to compute gsm. [2][3]
  • Yield (m²/kg): 1000 ÷ gsm. [1][2][3]
  • Make-ready waste: fixed setup sheets/meters; separate from running %. [4]
  • Finishing pass: an additional machine pass (foil, emboss, spot UV). [6]
  • Incoterms® 2020: standardized trade terms; CIP insurance higher than CIF. [7]
  • Import VAT (UK/EU): tax on customs value base per guidance. [10]
  • MPF/HMF (US): CBP Merchandise Processing Fee and Harbor Maintenance Fee. [8][9]
  • EPR/PPT (UK): EPR base fees by material; PPT £225.66/t if <30% PCR. [11][12]
Concept map
  • Material → thickness/density/grammage → Yield → Material Cost
  • Process → make-ready (fixed) + running waste (%) → Waste Cost
  • Finishing → pass count + tooling + register risk → Surcharge
  • Trade term → customs value base → Duty/Fees/VAT
  • Compliance (EPR/PPT/PPWR) → Regulatory cost lines

3. Standards, Regulations, and Governance

Canonical sources to cite
  • ISO 536 (grammage). [1]
  • ISO 4593 / ASTM D6988 (film thickness). [2][3]
  • Incoterms® 2020 – ICC (CIP vs CIF). [7]
  • US CBP: MPF/HMF. [8][9]
  • UK HMRC: customs valuation and import VAT. [10]
  • UK EPR base fees 2025; RAM/modulation from 2026. [11]
  • UK PPT rate (2025/26). [12]
  • EU PPWR status & timing. [13]
  • EU TARIC (duty lookup) and WCO HS 2022. [14][15]
TopicUSEUUK
Border feesMPF (ad valorem, min/max), HMF 0.125% (ocean) [8][9]No MPF/HMF equivalentNo MPF/HMF equivalent
Import VATNone federallyImport VAT per customs valuationImport VAT per customs valuation [10]
Duty lookupUSHTSTARICUK Global Tariff
EPRState initiatives emergingPPWR in force (~mid‑2026 application) [13]EPR base fees live 2025; RAM modulation 2026 [11]
Plastic taxNone federallyMember‑state specificPPT £225.66/t (2025/26) [12]
Upcoming changes
  • EU PPWR general application ≈ 18 months after 11 Feb 2025. [13]
  • UK RAM modulation rules apply from 2026. [11]

4. Evidence Base & Benchmarks

  • Measurement standards: ISO 536; ISO 4593/ASTM D6988. [1][2][3]
  • Material density (yield): PET ≈ 1.39; PP ≈ 0.90–0.91; LDPE ≈ 0.92 g/cm³. Use TDS. [16][17][18]
  • UK EPR base fees (2025, £/t): Al 266; paper/card 196; plastic 423; glass 192; steel 259; wood 280; fibre-based composites 461; other 259. [11]
  • UK PPT (2025/26): £225.66/t if <30% PCR. [12]
  • Waste allowances: treat as supplier‑specific; capture empirical data. Evidence gap. [4][5]

5. Design & Production Implications

Rules of thumb
  • Films → mass & yield. gsm = density × thickness(µm); yield = 1000/gsm. Designer tip: 50 µm PET (~69.5 gsm) vs 50 µm BOPP (~45 gsm) ≈ 35% mass reduction (check performance). [2][3][16][17]
  • Cartonboard → kg/1000 sheets = sheet area (m²) × gsm (ISO 536). [1]
  • Finishing → costs are pass‑driven. Dies, passes, register tolerances dominate surcharges; avoid tiny type and tighten register only where justified. [6]
Manufacturability flags
  • Register‑sensitive finishes may require multi‑pass plans; budget press time accordingly. [6]
  • Metal decoration with UV can change speed/energy profile; manage adhesion/substrate prep. [19]

6. Sustainability & Compliance Cost Lines

  • UK EPR: per‑tonne line item using base fees; RAM modulation from 2026 (R/A/G). [11]
  • UK PPT: £/t × plastic tonnage if <30% PCR. Track PCR substantiation. [12]
  • EU PPWR: plan for harmonized recyclability and fee modulation. [13]
  • Compliance watch: keep HS classification and duty lookup (TARIC/UKGT/USHTS) current. [14][15]

7. Workflow & Tooling (calculator‑ready)

Checklists
  • Print‑ready pack: material spec (gsm/µm, density), thickness method (ISO/ASTM), dieline and number‑up, stations/sides, finishing passes, explicit waste allowances (fixed + % run), target press/speed, QC tolerances, palletization. [1][2][3][6]
  • Compliance & landed cost: HS code, Incoterm, origin, duty source (TARIC/UKGT/USHTS), freight & insurance, US MPF/HMF, import VAT base (UK/EU), EPR & PPT applicability. [7][8][9][10][11][12][14]
Decision trees
  • Film vs paper label → stiffness/heat → PCR target → recyclability → density/µm → yield → cost.
  • Finishing method → effect → registration? → single vs multi‑pass → die type → throughput → surcharge.
Calculator blueprints
  1. A) Film yield & material cost — Inputs: thickness µm, density g/cm³, roll width m, roll length m, price/kg. Formulas: gsm = density × thickness; yield = 1000/gsm; area = w×l; mass = (area×gsm)/1000; cost = mass×price/kg. Standards: ISO 4593 / ASTM D6988. [2][3]
  2. B) Board yield & cost — Inputs: sheet W×H (mm), gsm, price/t. Sheet area m² = (W×H)/1e6; kg/1000 = area×gsm; Cost/1000 = (kg/1000 ÷ 1000) × price/t. Standard: ISO 536. [1]
  3. C) Waste allowances — Inputs: make‑ready (sheets/meters), running waste %, planned good output. Gross = good × (1 + %run) + make‑ready. Governance: record actuals per job. Evidence gap: authoritative cross‑process table. [4]
  4. D) Finishing surcharge — Inputs: pass count, die area cm², die material, press speed, hourly rate. Time (h) = (impressions ÷ speed) × pass count; Tooling = die cost; Surcharge = time×rate + tooling. [6]
  5. E) Landed cost (by Incoterm) — Inputs: goods value, freight, insurance, duty rate, fees, VAT rate. Customs value (typical CIF/CIP base) = goods + freight + insurance; Duty = customs×rate; US: add MPF/HMF; Import VAT (UK/EU) per guidance; add EPR/PPT rows if applicable. [8][9][10][11][12][14]

8. Category‑Specific Guidance

  • Beauty: high foil/emboss/soft‑touch; build art for register and pass minimization; model surcharge sensitivity. [6]
  • Food: weigh PET vs BOPP mass/stability; model PPT exposure vs PCR thresholds. [12][16][17]
  • Beverage: can/metal decoration; UV systems can change productivity/energy; adhesion prep matters. [19]

9. Case Studies

Case 1 — Film swap mass impact
Approach: Replace 50 µm PET (≈1.39 g/cm³) with 50 µm BOPP (≈0.90 g/cm³).
Result: gsm from ~69.5 → ~45 (≈35% reduction); more m²/kg, lower per‑unit mass; validate print/heat/seal and recyclability. [16][17]
Case 2 — Finishing pass consolidation
Approach: Re‑sequence (foil last), reduce coverage to single pass, widen register tolerance.
Result: One pass eliminated; fewer make‑ready sheets and press hours; quality preserved. Evidence gap: generalized pass‑time multipliers. [6]
Case 3 — Landed cost sensitivity (UK vs US)
UK (illustrative): Goods £5,000 EXW; freight+ins £800 → customs £5,800; Duty 6.5% = £377; Import VAT 20% on (£5,800+£377) = £1,235.40; PPT example 0.5 t × £225.66 = £112.83 → Total ≈ £7,525.23. [10][12]
US (illustrative, ocean): Goods $10,000; freight+ins $1,000 → customs $11,000; Duty 3% = $330; MPF ≈0.3464% ≈ $38.10 (min/max apply); HMF 0.125% = $13.75 → Total ≈ $11,381.85. [8][9]

10. Common Pitfalls & Red Flags

  1. Misusing Incoterms and mis‑baselining customs value. [7][10]
  2. Forgetting US MPF/HMF in landed cost. [8][9]
  3. Treating public “industry waste %” as universal; capture actuals. Evidence gap. [4]
  4. Under‑specifying finishing (die type, pass plan, register) → surprise surcharges. [6]
  5. Omitting EPR/PPT or future PPWR impacts. [11][12][13]

Appendices — Worked micro‑examples

  • A. Film labels (BOPP 50 µm @ 0.90 g/cm³): gsm = 0.90 × 50 = 45; yield ≈ 22.22 m²/kg; 100×50 mm label (0.005 m²) → ≈ 4,444 labels/kg. [2][3]
  • B. Cartonboard sheets (700×1000 mm @ 350 gsm): area = 0.7 m²; kg/1000 sheets = 0.7 × 350 = 245 kg. [1]

References

Primary standards & regulators
  1. ISO 536 — Grammage.
  2. ISO 4593 — Film thickness; mechanical scanning.
  3. ASTM D6988‑21 — Film thickness guidance.
  4. Różański et al., BioResources — Offset sheet waste minimization.
  5. Envirowise/FESPA — Digital printing good practice.
  6. FSEA — Designer’s Guide to Foil Stamping & Embossing.
  7. ICC — Incoterms® 2020 (CIP vs CIF insurance cover).
  8. US CBP — MPF overview/rates.
  9. US CBP — HMF 0.125% for ocean.
  10. HMRC — Customs valuation Method 1; import VAT base.
  11. GOV.UK (Defra/PackUK) — EPR 2025 base fees; RAM from 2026.
  12. HMRC — Plastic Packaging Tax rates (2025/26).
  13. European Commission — PPWR in force; application timing.
  14. European Commission — TARIC (duty lookup).
  15. WCO — HS 2022 nomenclature.
Datasheets & technical properties
  1. PET density ≈ 1.39 g/cm³ (representative TDS).
  2. BOPP/PP density ≈ 0.90–0.91 g/cm³ (representative datasheets).
  3. ACTEGA — UV direct‑to‑metal systems notes.
Evidence gaps: no single cross‑process waste table; plant‑agnostic finishing pass multipliers; public, stable border fee examples beyond regulator rate descriptions.
Designer tip: Normalize facestock comparisons to mass per 10,000 labels, then add setup waste and finishing pass time; don’t compare €/m² alone.
Manufacturing note: Lock units in every calculator (µm, g/cm³, gsm, m²/kg). Require supplier thickness method (ISO 4593 or ASTM D6988). [2][3]
Compliance watch: For UK quotes 2025–26, include EPR base fee and PPT lines; for EU export 2026+, plan for PPWR recyclability and fee modulation. [11][12][13]
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