Salt Lake’s Packsize boxes in e-commerce explosion with high-tech, earth-friendly packaging systems

Originally posted by Art Raymond and Deseret News on February 4, 2018.

While his on-demand packaging system has found success by anticipating the explosive growth of online commerce with an innovative and environmentally conscious solution, the backstory of Hanko Kiessner’s journey to launching Packsize in Utah reads like a tale pulled from the 19th century.

Kiessner, a German immigrant, had an opportunity to visit the U.S. in the mid-1980s thanks to a student exchange program that brought him from his home in Herford, located in Germany’s state of North Rhine-Westphalia, to Brigham City. The trip was a celebration of firsts for Kiessner — first time away from home, first plane ride and first time in the U.S.

And as for his first time in Utah, Kiessner said it was love at first sight.

“It was a fantastic experience,” he said. “I had the best time of my life when I came here.”

Kiessner said he remembers being struck by the friendliness of the people in Utah and that, during his visit, “some of the smallest things left the most lasting impressions.” Like the taste of the orange he was handed by his host family when first arriving at the airport in Salt Lake City, drive-through hamburgers and getting to go see a rocket engine test firing. He also had a revelation about where he would be seeking future fortune.

“Even at that time, I knew I wanted to play a role in the largest economy in the world,” Kiessner said.

After high school, Kiessner ended up on a waitlist to get into business school at a German university and decided to take a shot at getting into a Utah college. He was subsequently accepted at both Utah State University and the University of Utah and was, once again, packing his bags for a trip to the Beehive State.

Kiessner connected with more than undergrad and business school degrees while at the U. He also met his future wife — a Utahn — and, after completing his MBA, headed back to Germany to work with has father, who founded a business based on his innovation of “z-fold” corrugated cardboard. There he “learned everything there was to know about corrugated” preparing, as it would turn out, for a final journey back to Utah.

While working alongside his father, and growing his family, Kiessner was also thinking about what the future of the cardboard packaging business, featuring his father’s z-fold product, might look like. The process was revelatory, and in 2002, he and his wife decided to shift gears by uprooting from Germany and bringing the family, and a budding business concept, to Utah.

Kiessner said that they wanted to “immigrate the right way,” so like hundreds of thousands of Europeans before them, the family of five boarded a ship for the seven-day crossing of the Atlantic, a voyage that ended with a cruise by Ellis Island and the Statue of Liberty on the way to making port in New York City.

The flame lit by Kiessner’s first visit to Utah was still burning, and before boarding a train for Utah, he reminded his children why they’d come to U.S. during a visit to a New York neighborhood that’s become synonymous with American industry.

“I took my kids to Wall Street to the stock exchange and I told him we were going to become part of this great economy,” Kiessner said. “I admit, at the time when I said that, I had no clue as to how to go about this.”

Kiessner did not go clueless for long. Armed with his education and strong background in the cardboard business, Kiessner innovated a machine that was capable of building a box sized exactly to a customer’s needs, and do it in a matter of moments.

Keissner knew the idea had the potential to revolutionize an industry that had for years subsisted on selling premade boxes in a relatively small variety of sizes to product manufacturers. It took nine months for Packsize to earn its debut customer and after a year, they had three. Among those early subscribers to Kiessner’s on-demand system, however, was a box-consuming behemoth.

“Emerson Electric is a multi-billion dollar manufacturing company…they had something like 600 different box sizes and their inventory was stacked to the rafters,” Kiessner said. “They started using our machines and saved all this space, and money, making one box at a time.

“I feel so privileged they believed in us.”

Those first three customers would double the next year, and the year after that, and then again. Kiessner said his company has been averaging 40 to 50 percent annual growth and has continued to evolve its technology along the way. His equipment has gotten faster and smarter, and includes the development of a software platform, PackNet, that can manage networks of the on-demand box making equipment, as well as dovetail with the processes of clients that are driving his business.

At first, that was all about product manufacturers, but now, the real engine driving demand for packaging is online commerce.

How many boxes does our collective online shopping consume? A 2016 report by Bernstein Research estimated Amazon alone ships more than 600 million packages a year, a rate (at that time) of about 1.6 million a day. The report also notes the environmental impact of cardboard consumption, with 30 million tons flowing into the U.S. waste stream every year. Kiessner said that’s where his company’s raison d’etre, as reflected by their motto, “smart packaging for a healthy planet,” really comes into play.

Packsize’s z-fold cardboard is sourced from certified sustainably managed forests for starters, and the company’s right-sizing system leads to savings, Kiessner said, that multiply along the packaging/shipping pipeline. Making boxes appropriate to the size of contents captures an initial savings of 28 percent of cardboard usage. That leads to a 40 percent reduction of shipping volume and a 66 percent savings via freight efficiency.

All told, each one of Packsize’s containers earns a net carbon savings of 2 pounds of CO2. At the end of usage, recycling is key, and cardboard, according to the Bernstein report, is the most recycled waste product with a recovery rate that hit 93 percent in 2015. And those are statistics that matter to Packsize customers.

Jeremy Barker is the founder and CEO of Ogden’s Murphy Door Co. The company, founded in 2012, manufactures doors for outlets around the country, including Home Depot. Barker said before connecting with the Packsize equipment, his packaging approach of buying presized boxes was an embarrassing waste generator.

“It just wasn’t practical for us to buy and stock boxes for every door size we make, with sizes that vary between 24 and 36 inches wide and every size in between,” Barker said. “We ended up just buying the biggest size box and putting everything in it.”

Barker said the waste rate, which was nearly 50 percent for packaging the smallest Murphy doors, disappeared when the company brought the Packsize machine online. And he noted its ease of operation and efficiency integrated smoothly into their production flow.

“The machine is super easy to program, and we can put someone on it and they’re fluent in its use by the end of the day,” Barker said. “We’re not just saving resources and waste, but it’s also just a lot more efficient that what we were doing before.”

As Kiessner looks ahead, he sees only bright days for Packsize. The still-booming e-commerce world is still catching up to the on-demand, right-sizing solution that Kiessner innovated, and he estimates less than 20 percent of the potential market has been tapped.

The ongoing drive toward automation in the fulfillment side of the business bodes well too, as Packsize equipment, with the PackNet software, is well-positioned to become part of a process that is likely to eliminate the human element of the system in less than a decade.

And Kiessner’s early crush on Utah hasn’t seemed to fade, either.

“This has been a wonderful place to start and grow this business and to raise our family,” Kiessner said. “I’ve never regretted the decision.”

Kiessner’s overarching goal with his “right-size” packaging system is, and has been, to optimize packaging operations for his customers, but doing it in a way that reduces, in significant ways, how those packaging needs impact the world and it’s threatened environmental systems.

Originally posted by Art Raymond and Deseret News on February 4, 2018.

By | 2018-02-08T10:09:43+00:00 February 4th, 2018|Blog, Member News|0 Comments

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