Ugly drum wood question

Happy New year all! I have a very simple question but just need a second opinion. I usually use fist sized chunks of wood in my basket but for xmas my mother-in-law gave me a couple of bags of chipped apple wood. How should I put it in the basket? the only time I ever used chips it smoked like crazy during the warm up then when the meat went on the chips had all burned up. I have seen people wrap it in foil and punch holes in the foil. Would that be the answer?

Thanks guys that what I thought. I'll just return them and get some lump. Just lit the uds for a overnight cook and it's frickin cold.