Exploring the benefits and trade-offs of sustainable packaging
We recently conducted a research project on sustainable packaging which found that waste reduction, along with CO2 reduction, is a major key performance indicator (KPI) for many companies trying to improve sustainability. Discover what potential packaging solutions are out there and the impact they might have on other sustainability goals.
Organizations have long understood that in the fight against climate change, it’s crucial for them to reduce or eliminate their CO2 emissions. Now, however, an increasing number of environmentally conscious companies realize they must widen their focus and take steps to reduce the waste they create as well. As a result, companies are extremely aware of the packaging their products are transported, wrapped, or boxed in, and they want their packaging to be as sustainable as possible as products move through their supply chain.
DHL Consulting recently completed a research project on sustainable packaging that revealed waste reduction, in addition to CO2 reduction, is a major key performance indicator (KPI) for many companies’ sustainability agenda. In fact, 57% of DHL customers said that the introduction of eco-friendlier packaging is a near-term packaging focus area.1) This shows that in addition to CO2, waste reduction is becoming an important aspect of many companies’ sustainability agendas.
It’s useful to define what the term ‘packaging’ means. At the warehouse operations end of the scale, the end the public doesn’t see, it can include everything from pallets to stretch wrap (a film that secures boxes onto a pallet). At the last mile delivery end, it could be as simple as a box or bag that is delivered into the hands of the customer.
In total, there are two broad categories of packaging. The first is single use packaging that can be used once before it must be discarded. A cardboard box is an example of single use packaging. The other is, reusable packaging that must be returned empty to its source to be refilled and sent back out.
Due to the different types of packaging, there will always be trade-offs between waste and carbon emissions. Switching to reusable packaging simply because it reduces waste, could be a counterproductive move. In fact, without understanding the bigger sustainability picture, a company may increase its CO2 emissions while trying to reduce its waste. Please see figure 1 for an in-depth view of trade-offs between waste and CO2.
For instance, paper bags are marketed as a more sustainable packaging solution but are four times more energy intensive to make compared to plastic bags. And while light-weighted plastic packaging can help an organization reduce its carbon footprint by making products easier to transport, it’s important to remember that plastic doesn’t decompose and is responsible for generating the majority of global waste. This means that a company must clearly define its sustainability goals in terms of CO2 and waste before determining what steps it should take to reach those goals.
Three Steps Towards More Sustainable Packaging
Because of the trade-offs that exist in the sustainability sphere, finding the right sustainable packaging solution for a company’s needs requires consideration and collaboration between different stakeholders. It’s why DHL is working closely with its customers to establish the customized solutions for their business models and products.
What is plain, however, is that sustainable packaging is driven by “the three Rs”: Reduce, Reuse, and Recycle.
- 1. Reduce
Companies can optimize costs, eliminate waste, increase operating efficiency — and so reduce their carbon emissions — by reducing the amount of packaging they use.Hanko Kiessner, CEO of global packaging equipment manufacturer Packsize, estimates that the average box is 40% too large for its contents. This means that packages are using more material than necessary and because less packages can fit in the same amount of space, it also requires more additionally transportation compared to a correctly sized package. Between the additional material and transport, waste, CO2 emissions, and cost are all increased.
In addition to increasing the cost of shipping the package, putting products in the right-sized packaging is important because it reduces the amount of void in the package and therefore the amount of void fill needed to keep the product stable while in transit. Void fill is commonly additional cardboard, Styrofoam, or inflated plastic that is used to keep a product moving within its box.
To reduce the amount of packaging used, a process called right-sizing is utilized. In right-sizing, the size of the box is matched with the size of its contents either by allowing the packer to choose from many different box sizes or through a machine that cuts existing boxes to the size of their contents. In turn, this reduces the size of the box and amount of void fill that is needed to ship the box.
However, before implementing the “reduce” option, it’s important to consider cost and time issues. Right-sizing may involve financial investment and training to implement the necessary equipment. Additionally, searching for, or cutting, a box that is the proper size for its contents requires additional time which will decrease the efficiency of the packing operation and may increase labor costs.
Reducing void fill also decreases the amount of protection that a package has which could cause an increase in damaged shipments. Damaged shipments result in wasted resources via potentially disrupting sorting operations, additional customer support interactions, and environmental waste steaming from the return shipments to the manufacturer. Therefore, it is vital for companies to understand their supply chain and balance the tradeoffs between waste and cost.
- 2. Reuse
Society once had a disposable attitude to products and packaging. Now, however, more people are finding creative ways to give used material another life. This helps support the circular economy and drives down emissions.
For example, multi-use packaging is a sustainable innovation which means that customers don’t have to throw packaging away, because it can be resealed and used again. This makes it ideal for product returns. Similarly, reusable capsules — such as plastic containers, crates, and shipping bags — can be employed more than once, and therefore have sustainable credentials.
Yet companies thinking about the ‘Reuse’ option do need to consider this: because reusable packaging must be shipped back to the warehouse, it effectively doubles the CO2 footprint of last mile delivery. This means that innovative solutions need to be developed to minimize the return leg CO2 emissions. The return process has been further complicated by the COVID-19 pandemic as the packages must undergo extra cleaning in between uses resulting in previously unaccounted for waste.
All reusable solutions require a number of uses until the waste they save is greater than the energy used to make the packaging. DHL Consulting carried out a project for the World Wildlife Fund that found that the packaging in Singapore would have to be returned between 4 and 6 times before the CO2 emissions from reusable bag are less than the conducting the same trips with disposable packaging2) (Figure 2).
Therefore, reusable solutions should be only implemented in areas or with products that can guarantee a high return rate. While reusable solutions in a circular economy are some of the most transformative solutions in the packaging industry, they require additional maturation to become effective solutions for all companies.
- 3. Recycle
Recycling takes a material at the end of its life and either turns it into a new product or disposes of it in an eco-friendly way. From a sustainability perspective, this is a relatively easy way to make packaging more sustainable without a significant change to a company’s business model. Even simple solutions such as adding recycling bins at distribution centers can make an impact.
For more advanced solutions, using recycled material throughout the packaging process is a popular strategy. Boxes from recycled material are becoming more of a commonplace in the logistics industry, but recycling can extend to other aspects of packaging. For example, companies can use old packaging material as void fill rather than using new material. Solutions like this will help repurpose waste in a way that is good for a company’s brand image and our world.
Nevertheless, there is a trade-off to consider with the “Recycle” solution. In addition to higher cost, recycled material becomes weaker each time it is recycled. Material that is designed to be easily recycled, such as bio-based packaging, is not as strong as brand-new cardboard. The more recycled material used in packaging, the less protective it potentially becomes, leading to an increased chance of damage during transit. As discussed in the reduce section, this could potentially cause an increase in waste if damaged products must be discarded and resent to the customer.
Wrapping It Up
Sustainable packaging demands proper engagement and an understanding of the variables at play. There are certain basic steps that companies need to make from the outset, such as reusing packaging and encouraging recycling. After that, they must take the best packaging decisions for their own needs based on their company strategy and sustainability KPIs.
As processes evolve, environmental regulations change, and with supply chains in constant flux, new solutions will always be required to ensure sustainability goals can be achieved. It’s therefore essential that every company closely monitors its activities around packaging and adapts quickly to meet new sustainable realities as they occur. DHL Consulting can assist with weighing packaging options within the broader context of sustainability and help determine which solutions makes sense for each companies’ unique situation.
1) DHL Trend Research, survey with 750 customers
2) DHL Consulting team analysis
Delivering Action on Plastic in Singapore
DHL Consulting has been studying the feasibility of reusable packaging in Singapore’s booming e-commerce sector.
The topic of sustainable packaging is a key focus for DHL Consulting, which recently completed a feasibility study for reusable e-commerce packaging in Singapore. This was carried out on behalf of the World Wildlife Fund, one of the world’s largest and most respected independent conservation organizations.
E-commerce is an opportunity and a challenge in Singapore. On the plus side, the sector is booming, with over 200,000 e-commerce parcels delivered daily. Furthermore, it shows no sign of slowing down and, indeed, is expected to grow 50% by 2025. Naturally, this exponential growth means a massive increase in packaging, which presents the country with a huge sustainability issue.
With this in mind, DHL Consulting’s project aimed to answer three key questions: can reusable packaging be an environmentally sustainable option in Singapore, what are the critical considerations for implementing reusable e-commerce packaging, and how can reusable packaging be implemented in Singapore?
After extensive research, DHL Consulting found that reusable packaging is a promising concept that can reduce waste generated by Singapore’s e-commerce sector. It also identified a number of critical considerations for implementing reusable e-commerce packaging, and the best approaches to make it a viable proposition.
You can read the full report here: https://plastic-action.asia/wp-content/uploads/2021/11/WWF_Delivering-on-Circularity_2021.pdf
Get in Touch With Us
Jens Stratmanns – Partner and Sustainability Lead, DHL Consulting
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