What is the ROI of corrosion protection?
There was a recent press release about a company that created an online ROI calculation tool for adding corrosion inhibitors to road salt brine. See press release here. While this is an industry that Packnet does not serve, this press release does bring up an interesting point: what is the ROI on any investment for inhibiting corrosion.
The cost of corrosion can be hard to quantify. According to NACE International, the cost of metallic corrosion in the US for 2002 exceeded 276 billion dollars per year; this was one of the largest and most comprehensive studies done on corrosion. Source. According to G2MT Laboratories that figure is probably over 1 trillion dollars per year in 2015. Source. Obviously corrosion is costing our economy a huge amount of money, yet how does this break down for each individual case.
Calculating the cost, and then the ROI is difficult because in many cases the effect of corrosion may be hidden or difficult to trace back to the original manufacturer. It is estimated that a significant amount of electronics devices fail because of corrosion, but corrosion failure rarely gets back to the manufacturer because it is not always diagnosed as corrosion. Usually the technician who is servicing the device replaces the part and doesn’t bother to diagnose why the component failed.
Determining the cost of corrosion depends on your product and industry. The cost of addressing corrosion on a custom built automated machine could be extremely expensive as it may involve reshipping product back to manufacturer, totally disassembly machine, cleaning or replacing corroded parts, retesting, repackaging and reshipping.
Here are a few considerations based on past news items and case studies:
- Is there potential human well being at stake? In 2011, a Bell 206B Helicopter made a forced landing due to corrosion of critical metal components. Fortunately no one was injured, but the potential costs of human injury and law suits could probably bankrupt most companies. This the most significant area for calculating ROI,
- In one case study we presented, the parts were shipped overseas; they were rejected and sent back. The company had to replace parts on an expedited bases and airship product back to the customer. In this case the cost probably was 2x the original product cost.
- Rebar can corrode and degrade the integrity of a concrete slab: bridges, buildings, roads and parking ramps are prime areas of concern. The cost of replacing concrete in these structures can be well into the millions or even billions of dollars.
- Sophisticated electronic controls on automated equipment that gets shipped overseas can corrode when exposed to the salt mist of the ocean. Equipment failure due to electronics failure requires technicians to fly to the destination, and perform a series of tests, once issue is identified replace the electronics. In addition to the cost of diagnostics and replacement, many custom equipment manufacturers may be liable for loss revenue due to equipment downtime.
There are countless examples that could be enumerated. In reality, the cost of corrosion protection is so small compared to any risk, it seems almost fool hearty to not address corrosion proactively. The biggest issue for addressing corrosion, is not cost, but knowledge and understanding. Cortec is the world’s leading expert on corrosion inhibitors. Countless businesses across the world seek out Cortec for corrosion consultation. We at Packnet believe that addressing corrosion should be a consideration of every packaging solution. Packnet is a distributor of Cortec product, for more information please visit or corrosion inhibitor webpage, or call us at 952-944-9124.