This paper proposes a three-tier characterization of Physical Internet containers into transport, handling and packaging containers. It first provides an overview of goods encapsulation in the Physical Internet and of the generic characteristics of Physical Internet containers. Then it proceeds with an analysis of the current goods encapsulation practices. This leads to the introduction of the three tiers, with explicit description and analysis of containers of each tier. The paper provides a synthesis of the proposed transformation of goods encapsulation and highlights key research and innovation opportunities and challenges for both industry and academia.