This industry includes establishments that derive more than 50 percent of their revenues from packing, crating, and otherwise preparing goods for shipping. Establishments primarily engaged in packaging and labeling merchandise for purposes other than shipping, such as retail packaging, are classified in SIC 7389: Business Services, Not Elsewhere Classified.
Packing and Crating
Most large manufacturers in the United States pack or crate their own goods for shipment, rather than relying on the specialty firms of this industry. Packing services in this industry are offered by many firms primarily engaged in other activities, such as shipping of freight. Firms specializing in the shipping aspects, however, are not included in this industry. Establishments in the industry typically offer a line of shipping-related services, such as supplying packing materials, physically packaging goods to the sender's specification, and transporting goods to and from the packaging plant. Some businesses also arrange for the final shipment of goods, either through third-party services or through their own shipping networks, and may offer clients insurance policies on goods shipped and computer tracking of goods.
Packaging and crating is a $100 billion industry, with four general segments classified by material type—paper and board, plastics, glass, and metal. A large, fragmented industry, it comprises thousands of competitors serving a variety of markets. The largest market for packaging products is the food and beverage industry, with health care products showing the strongest annual growth, at 5 percent. Food and beverage combined experienced annual growth in the 3 to 4 percent range during the early 2000s.
Characteristic of the 1990s, packing and crating was part of the rise in small business start-ups. They responded to the needs of successful entrepreneurships that could not afford the packaging and crating of their own goods. A niche market was born: the "co-packing" industry. The term was first used in France in 1998, but quickly spread to the United States. The concept was simple: by outsourcing the packing end of the business, many small companies could direct their resources to sales and marketing. By 1999 co-packing was common jargon in smaller businesses, and had been employed in several larger ones, including Land O' Lakes Dairy Foods and Quaker Oats.
In the 2000s, industry...