David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
When something needs to be moved or stored in or around the DC, most people grab a box—a corrugated carton. A mainstay of shipping operations everywhere, the familiar six-sided carton can be used for an endless variety of applications. But it's not necessarily the best choice. For all its virtues, the corrugated cardboard box has drawbacks too: it's an easy target for thieves, it's easily pierced or crushed, it's prone to snagging when used in automated handling operations, it requires disposal after use. That's why more and more operations are bypassing cardboard for an alternative that has none of these shortcomings: the returnable plastic container.
It's not hard to understand why returnables are making headway in the container market. Most commonly made of plastic (though they can be made of wood or metal), returnable containers trump cardboard in a number of ways, their advocates say: They reduce purchasing and disposal costs. They offer a higher level of security. They offer better ergonomics. And they do a better job of cubing out space.
Better still, they're versatile. Returnables come in designs and sizes to fit just about any application. Large bulk containers, for example, can be used for transporting large items (or a multitude of small items) or for storing products in racks. They're typically designed with fork entries to allow easy transport via lift trucks or pallet jacks. And many times these containers offer hinged side doors that, when lowered, allow easy access to the items inside. Many bulk containers also come with collapsible sidewalls so that they can be easily stored or transported when empty.
Smaller containers are typically designed so that when placed side by side, they match the footprint of a standard 40- by 48-inch pallet. They offer a wide range of stacking configurations, and most are designed with top and bottom grooves to facilitate stacking into solid cubes that can max out available space in storage racks or on trucks. Top covers—and sometimes straps—hold the load together during transit for a secure ride.
Safe and secure
Returnables easily outperform their corrugated counterparts when it comes to product protection, according to plastic container manufacturers. Most returnable containers used for shipping offer hinged lids to help protect the products placed inside. Typically, they're also designed to accommodate security cable ties that loop through the lid and a hole in the container's sidewall. This locks the lid in place and discourages theft of the contents. A broken tie provides an easy method of identifying containers that may have been breached. And because they are made of sturdy plastic, which resists piercing or crumpling, these containers also tend to protect products better than corrugated cartons can.
Most returnable containers are also designed to stack one on top of another to save floor space. Turn one container 180 degrees in the opposite direction and it can be inserted into the empty tote below it for dense stacking. This "nesting" feature allows a large number of empty totes to occupy a small space in storage racks or for transit back to the facility.
Because plastic containers come in uniform sizes, they're ideal for use with automated material handling systems. They're also the container of choice for automated mini-load systems and carousels because, unlike corrugated cartons, they have no rough edges that can snag when used in automated systems. Further, they can be easily transported on conveyors and sorting systems.
Plastic containers are also designed to work well with the latest in inventory control technology. Most are designed with special areas on their outside panels to accommodate bar-code labels and RFID tags. These areas are recessed so that conveyors or other material handling equipment will not tear the tags as they move through the distribution operations.
Easy on the back
Plastic returnable containers also offer
ergonomic advantages over cardboard cartons, according to plastic crate manufacturers. Easy-to-grip handles on the plastic containers' ends make them much easier to lift and move than corrugated cartons. And their uniform size helps ensure that loads don't exceed weight limits. Many companies will designate specific sizes of containers for certain classes of products, knowing exactly how many items can be picked into the containers before they reach a maximum threshold for safe lifting.
Since plastic containers can be made in virtually any color, some facilities designate certain colors to represent the various functions within the distribution facility. Red may be reserved for picking tasks, while a green container may signify that the items inside are destined for a value-added service station.
Taking advantage of this, some of the more sophisticated conveyor systems have sensors built in that are able to distinguish colors. Pickers completing a wave of orders may pick the last products into, say, a yellow container to signal that this completes the wave. Once the container is sent off to the sorting equipment, the sensor identifies the yellow tote as the last tote to be diverted to a particular spur line.
Closing the loop
By their very nature, plastic containers must be reused again to be cost effective. Because of this, most reusable containers in use at distribution centers are used exclusively within the facilities. But that's not always the case. Some companies have developed distribution systems that call for their containers to be shipped out to stores and select customers. These, however, must have some mechanism for returning the containers to the distribution center for reuse. Companies operating such closed-loop systems often ship the containers on their own dedicated fleet (see sidebar). Filled totes are dropped off at delivery and empties are gathered for the return trip back to the DC.
Pooled container programs offer an alternative for those companies wishing to use reusable containers but that don't operate under a closed-loop distribution model. With pooled programs, the containers are owned by the pooling company. The pooler takes responsibility for retrieving the empty containers, washing them and delivering fresh empties to the distribution centers.
The best thing about returnable containers is that they can be used over and over again, making them extremely cost effective.When they do reach the end of their lives following hundreds of trips, they can be recycled easily, which also makes them a sound environmental choice.
urban legends
For Sneaker Villa, a chain of a dozen stores featuring the latest hip-hop clothing and shoes designed for the urban lifestyle, corrugated boxes are so yesterday. Last year, the Philadelphia-area chain bought 500 reusable plastic containers from Buckhorn to replace the corrugated boxes it was using to ship split-case orders of clothing and accessories to its stores. The company was so pleased with the totes' performance that it bought another 500 this summer.
Today, jeans, sweatsuits, jerseys, belts and other accessories (everything but the shoes) are picked into plastic containers at the company's Wyomissing, Pa., distribution center, before being loaded onto Sneaker Villa's own fleet of trucks for transport to stores. About 500 totes ship weekly, with most stores receiving deliveries two to four times during the week. Each store delivery includes anywhere from 15 to 50 containers, depending on store volumes and the selling season.
Once emptied, the containers can be nested inside each other to save space when stacked in the stores' backrooms. The empties are picked up for the return trip back to the DC upon the next delivery.
The durable totes, each measuring 27 by 17 by 12 inches, are uniform in size, which makes them easy to handle. That uniform size also provides much more stable stacking for transit than cardboard cartons can and makes it easier for managers to calculate payloads. "They cube out the pallet and allow us to easily know how many containers can fill a truck," explains Brandon Naples, warehouse manager for Sneaker Villa.
The plastic totes easily outperform cardboard boxes when it comes to product protection. And the attached-lid totes offer greater security than the corrugated boxes they replaced. Sneaker Villa uses cable ties to seal the lid of each container before it leaves the DC, so it can tell at a glance if a container has been opened.
The plastic containers offer other advantages as well. For example, the containers feature textured side panels that make it easy for workers to remove old shipping labels before new ones are applied. They also feature ergonomic handles that make the totes easy to lift and carry, reducing the potential for injuries. "We have not had anyone hurt lifting them," says Naples. "The handles make them so much easier to move."
the case for cardboard
For every company like Sneaker Villa that's embracing the plastic returnable container, there are several others that are sticking
with the plain old cardboard box. For all the recent interest in returnables, corrugated boxes, with their ready availability and low cost, still far outsell their plastic counterparts.
That's not to imply that users only choose cardboard as a matter of convenience. Corrugated boxes offer a number of benefits, according to the Corrugated Packaging Council, a Rolling Meadows, Ill.-based advocacy group. On its Web site (cpc.corrugated.org), the council provides an extensive list of the advantages of using corrugated cartons, including the following:
Low shipping costs. With their light weight, high stacking strength and space-efficient packing geometry, corrugated cartons are cheaper to ship than plastic crates, the council claims. And unlike companies using plastic containers, those who choose cardboard avoid the expense of returning the containers, cleaning the crates, tracking their whereabouts in the distribution system, and modifying existing packing methods and equipment to accommodate the new shipping container.
High level of product protection. The fluted construction of a corrugated box offers superior product protection through built-in air cushioning, according to the council. If needed, cartons can be customized to provide extra protection for heavy, fragile or hazardous materials.
Ease of customization. Today's computer-designed corrugated boxes can be customized to accommodate an ideal pack count for a particular commodity. In addition, corrugated packaging can be cut and folded into an infinite variety of shapes and sizes.
Supports marketing efforts. Corrugated packaging can be printed with colorful, high-quality graphics, the council notes, enabling the containers to serve as traveling billboards. In many cases, the corrugated carton serves as the primary package all the way to the sales floor, reducing packaging costs for the manufacturer and handling costs for the retailer.
Easy availability. More than 1,600 box plants in the United States and Canada produce corrugated, making it readily available anywhere in North America.
Environmental friendliness. Though plastic crates are reusable, they're made from a non-renewable resource: fossil fuels. A significant percentage of plastic crates eventually end up in landfills where they do not degrade, the council reports. By contrast, currently about 74 percent of all corrugated is recovered for recycling and then used to make new corrugated boxes.
Most of the apparel sold in North America is manufactured in Asia, meaning the finished goods travel long distances to reach end markets, with all the associated greenhouse gas emissions. On top of that, apparel manufacturing itself requires a significant amount of energy, water, and raw materials like cotton. Overall, the production of apparel is responsible for about 2% of the world’s total greenhouse gas emissions, according to a report titled
Taking Stock of Progress Against the Roadmap to Net Zeroby the Apparel Impact Institute. Founded in 2017, the Apparel Impact Institute is an organization dedicated to identifying, funding, and then scaling solutions aimed at reducing the carbon emissions and other environmental impacts of the apparel and textile industries.
The author of this annual study is researcher and consultant Michael Sadowski. He wrote the first report in 2021 as well as the latest edition, which was released earlier this year. Sadowski, who is also executive director of the environmental nonprofit
The Circulate Initiative, recently joined DC Velocity Group Editorial Director David Maloney on an episode of the “Logistics Matters” podcast to discuss the key findings of the research, what companies are doing to reduce emissions, and the progress they’ve made since the first report was issued.
A: While companies in the apparel industry can set their own sustainability targets, we realized there was a need to give them a blueprint for actually reducing emissions. And so, we produced the first report back in 2021, where we laid out the emissions from the sector, based on the best estimates [we could make using] data from various sources. It gives companies and the sector a blueprint for what we collectively need to do to drive toward the ambitious reduction [target] of staying within a 1.5 degrees Celsius pathway. That was the first report, and then we committed to refresh the analysis on an annual basis. The second report was published last year, and the third report came out in May of this year.
Q: What were some of the key findings of your research?
A: We found that about half of the emissions in the sector come from Tier Two, which is essentially textile production. That includes the knitting, weaving, dyeing, and finishing of fabric, which together account for over half of the total emissions. That was a really important finding, and it allows us to focus our attention on the interventions that can drive those emissions down.
Raw material production accounts for another quarter of emissions. That includes cotton farming, extracting gas and oil from the ground to make synthetics, and things like that. So we now have a really keen understanding of the source of our industry’s emissions.
Q: Your report mentions that the apparel industry is responsible for about 2% of global emissions. Is that an accurate statistic?
A: That’s our best estimate of the total emissions [generated by] the apparel sector. Some other reports on the industry have apparel at up to 8% of global emissions. And there is a commonly misquoted number in the media that it’s 10%. From my perspective, I think the best estimate is somewhere under 2%.
We know that globally, humankind needs to reduce emissions by roughly half by 2030 and reach net zero by 2050 to hit international goals. [Reaching that target will require the involvement of] every facet of the global economy and every aspect of the apparel sector—transportation, material production, manufacturing, cotton farming. Through our work and that of others, I think the apparel sector understands what has to happen. We have highlighted examples of how companies are taking action to reduce emissions in the roadmap reports.
Q: What are some of those actions the industry can take to reduce emissions?
A: I think one of the positive developments since we wrote the first report is that we’re seeing companies really focus on the most impactful areas. We see companies diving deep on thermal energy, for example. With respect to Tier Two, we [focus] a lot of attention on things like ocean freight versus air. There’s a rule of thumb I’ve heard that indicates air freight is about 10 times the cost [of ocean] and also produces 10 times more greenhouse gas emissions.
There is money available to invest in sustainability efforts. It’s really exciting to see the funding that’s coming through for AI [artificial intelligence] and to see that individual companies, such as H&M and Lululemon, are investing in real solutions in their supply chains. I think a lot of concrete actions are being taken.
And yet we know that reducing emissions by half on an absolute basis by 2030 is a monumental undertaking. So I don’t want to be overly optimistic, because I think we have a lot of work to do. But I do think we’ve got some amazing progress happening.
Q: You mentioned several companies that are starting to address their emissions. Is that a result of their being more aware of the emissions they generate? Have you seen progress made since the first report came out in 2021?
A: Yes. When we published the first roadmap back in 2021, our statistics showed that only about 12 companies had met the criteria [for setting] science-based targets. In 2024, the number of apparel, textile, and footwear companies that have set targets or have commitments to set targets is close to 500. It’s an enormous increase. I think they see the urgency more than other sectors do.
We have companies that have been working at sustainability for quite a long time. I think the apparel sector has developed a keen understanding of the impacts of climate change. You can see the impacts of flooding, drought, heat, and other things happening in places like Bangladesh and Pakistan and India. If you’re a brand or a manufacturer and you have operations and supply chains in these places, I think you understand what the future will look like if we don’t significantly reduce emissions.
Q: There are different categories of emission levels, depending on the role within the supply chain. Scope 1 are “direct” emissions under the reporting company’s control. For apparel, this might be the production of raw materials or the manufacturing of the finished product. Scope 2 covers “indirect” emissions from purchased energy, such as electricity used in these processes. Scope 3 emissions are harder to track, as they include emissions from supply chain partners both upstream and downstream.
Now companies are finding there are legislative efforts around the world that could soon require them to track and report on all these emissions, including emissions produced by their partners’ supply chains. Does this mean that companies now need to be more aware of not only what greenhouse gas emissions they produce, but also what their partners produce?
A: That’s right. Just to put this into context, if you’re a brand like an Adidas or a Gap, you still have to consider the Scope 3 emissions. In particular, there are the so-called “purchased goods and services,” which refers to all of the embedded emissions in your products, from farming cotton to knitting yarn to making fabric. Those “purchased goods and services” generally account for well above 80% of the total emissions associated with a product. It’s by far the most significant portion of your emissions.
Leading companies have begun measuring and taking action on Scope 3 emissions because of regulatory developments in Europe and, to some extent now, in California. I do think this is just a further tailwind for the work that the industry is doing.
I also think it will definitely ratchet up the quality requirements of Scope 3 data, which is not yet where we’d all like it to be. Companies are working to improve that data, but I think the regulatory push will make the quality side increasingly important.
Q: Overall, do you think the work being done by the Apparel Impact Institute will help reduce greenhouse gas emissions within the industry?
A: When we started this back in 2020, we were at a place where companies were setting targets and knew their intended destination, but what they needed was a blueprint for how to get there. And so, the roadmap [provided] this blueprint and identified six key things that the sector needed to do—from using more sustainable materials to deploying renewable electricity in the supply chain.
Decarbonizing any sector, whether it’s transportation, chemicals, or automotive, requires investment. The Apparel Impact Institute is bringing collective investment, which is so critical. I’m really optimistic about what they’re doing. They have taken a data-driven, evidence-based approach, so they know where the emissions are and they know what the needed interventions are. And they’ve got the industry behind them in doing that.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
“Unrelenting labor shortages and wage inflation, accompanied by increasing consumer demand, are driving rapid market adoption of autonomous technologies in manufacturing, warehousing, and logistics,” Seegrid CEO and President Joe Pajer said in a release. “This is particularly true in the area of palletized material flows; areas that are addressed by Seegrid’s autonomous tow tractors and lift trucks. This segment of the market is just now ‘coming into its own,’ and Seegrid is a clear leader.”
According to Pajer, Seegrid’s strength in the sector is due to several new technologies it has released in the past six months. They include: Sliding Scale Autonomy, which provides both flexibility and predictability in autonomous navigation and manipulation; Enhanced Pallet and Payload Detection, which enables reliable recognition and manipulation of a broad range of payloads; and the planned launch of its CR1 autonomous lift truck model later this year.
Seegrid’s CR1 unit offers a 15-foot lift height, 4,000-pound load capacity, and a top speed of 5 mph. In comparison, its existing autonomous lift truck model, the RS1, supports six-foot lift height, 3,500 pound capacity, and the same top speed.
The “series D” investment round was funded by existing lead investors Giant Eagle Incorporated and G2 Venture Partners, as well as smaller investments from other existing shareholders.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”