Improving sustainability in the parcels market: two key focus areas

By Ken Fleming, President, Logistyx Technologies.

Sustainability in the supply chain is an issue that continues to move higher up the agenda as consumers increasingly opt for brands with a sustainable business model. 

They are taking multiple factors into account when making purchasing decisions – from the choice of raw materials, through factory locations, to recycling policies – meaning sustainability is permeating the entire supply chain.

For the customers we work with, being ‘green’ is becoming an essential requirement encompassing everything from making product origins more transparent than ever, to reviewing how goods are packaged, and how they are transported to minimise the impact on the environment.  

Fundamentally, being sustainable means different things to different customers, and the analytics capabilities of our SaaS-based Transportation Management Solution for global parcel shipping provides customers with the raw data and insights they need to continue to move their unique sustainability initiatives forward.  

Sustainability is not just about reducing the causes of environmental issues, but improving the operation to increase the efficiency of transportation. For ecommerce operations that ship parcels to customers, two important areas where sustainability should play a role in supply chain decisions are packaging and choice of shipping mode.

Packaging: reduce waste to improve sustainability and save costs

Reducing waste through reducing packaging depends on two factors: the material of the packaging itself and the amount of ‘air’ in the shipment.  Research by Packaging by Quadient, found that in around 60% of e-commerce deliveries, at least a quarter of the volume is composed of bubble wrap, polystyrene beads or just fresh air. Clear progress is evident in both areas as plastic packaging and filling materials are increasingly being replaced with recycled and/or recyclable materials.  

At the same time, we are seeing a reduction in package sizes, since, in addition to weight, carriers are charging based on the size of the consignment, helping to make those notorious examples of small packages in giant boxes increasingly rare. This not only helps to reduce environmental impact but also helps to save costs.

Sustainability, through the reuse of packaging material in the ecommerce returns process is a growing consideration, but it shouldn’t stop there. Shippers want to make the experience of returning orders as easy and seamless as possible by placing a returns label in the carton, allowing the consumer to return what they don’t require using the same carton with a pre-prepared label. 

However, since not all consumers will want to return their purchase, why not direct them to a website to click on the ‘return’ button, to initiate the return and print out a .pdf label on a home printer.  This ‘greener’ method can significantly reduce waste: if a company has 20% returns, 80% of pre-printed labels will simply end up in the bin.

Transportation efficiency – consolidate and go slow to go green

With regards to transportation decisions, two important ways to address sustainability goals are to consolidate shipments, and to select shipping modes that will minimise the impact on the environment.   Providing the ability to easily choose and select the ‘right’ way to ship any particular package from a range of carriers and couriers based on metrics, using a TMS for parcels makes navigating complex ecosystems manageable.

Consolidating shipments that are going to the same place allows for a reduction of corrugation and packing materials.  It can be easier said than done, but our TMS software can help companies to make those choices.  The ‘same place’ can vary.  It may be a B2B distributor sending multiple orders to the same company – or to different recipients within the same company – where the shipments can be consolidated and the orders dispersed to different employees upon receipt.  

Alternatively, consolidation can be a strategy applied when shipping to a country from which multiple customers await orders. Logistyx can help customers address this opportunity with break/bulk shipping capabilities.  In this case, all shipments to the country are labelled and sent as one shipment to an in-country carrier depot to go through customs as a single transaction and later get broken up into the original, individual shipments for domestic distribution.

In the ecommerce space, faster delivery and initiatives such as a 1-hour delivery window are commonly held to drive sales, yet we are seeing a growing demand for slower logistics services with reduced environmental impact.  Consumers are realising that faster doesn’t always equal better, and considering the consequences of their behaviour, asking themselves ‘do I really need this tomorrow?’.  Slower delivery tends to be greener.  Shipping mode and method have a major influence on carbon footprints; road rather than air transport (where applicable) and fully filled vans are simply more sustainable.

Finally, companies can explore the use of courier services, particularly in larger cities.  We’ve seen instances where a company will ship a package via FedEx or UPS to an address just down the street in order to get the tracking capability via the carrier’s systems.  If the same organisation uses a courier, the environmental impacts are much less.  

When developing sustainability in the supply chain, we need to look at all elements of reducing environmental costs and waste.  Much of the time it is the aggregation of many small steps that counts, and through our TMS for parcels, we enable our customers to take these steps at scale every day.