Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Packaging is playing a large role in helping shippers optimize their logistics operations, especially when it comes to implementing solutions that drive both efficiency and sustainability across a company’s supply chain. Whether you’re shipping items in bulk or fitting multiple items into a box to fill e-commerce orders, the right packaging solution can help you save time, speed operations, and become a better steward of the environment.
Here’s a look at two recent projects designed with efficiency and sustainability in mind.
IN PURSUIT OF THE CIRCULAR ECONOMY
European energy drink maker Red Bull was looking for a better, more efficient way to ship its bulk ingredients between facilities in Austria and the United States—one that would minimize the volume of ocean freight it shipped while also reducing the company’s environmental impact. Red Bull turned to German packaging and container company Cabka for a solution that is answering the call on both fronts.
Red Bull ships dry ingredients like sugar in flexible intermediate bulk containers (FIBCs)—large industrial bag-like containers made of flexible fabric, also referred to as “big bags.” FIBCs are designed to store and transport dry or granular materials—from powders, granules, and minerals to chemicals and food products. As an alternative to rigid containers, they can offer easier handling and reduced storage space, among other benefits. Red Bull was shipping its FIBCs using traditional, one-way wooden pallets loaded into 40-foot maritime containers—a process that was creating waste and inefficiency in its transportation processes.
Cabka solved the problem with a reusable pallet solution that is allowing Red Bull to take advantage of smaller, 20-foot shipping containers. The companies described the project in a joint statement released earlier this year.
Cabka’s Big Bag S5 pallet was created specifically to handle FIBCs. Made from recycled plastic, the pallets are designed to fit and protect the bags during transportation. Among the benefits, the pallet’s design centers the big-bag load, creating more stability during transport, according to Cabka. It also allows for the double-stacking of pallets without risking damage to the bag—which is common with traditional pallets, according to both companies—helping to maximize container space.
The solution is helping Red Bull eliminate waste and reduce costs: The company can now optimize the space within a standard 20-foot container, which has helped reduce the number of containers used by 20%. What’s more, the reusable containers create a closed-loop pallet system between Red Bull’s facilities in Austria and the United States—meaning the pallets make their way between both locations continuously, an approach that minimizes waste. And the pallets can be recycled at the end of their lifecycle, further contributing to the “circular economy.”
RIGHT-SIZED AND READY TO SHIP—FAST
Family-owned third-party logistics services (3PL) provider Barrett Distribution Centers needed to improve performance at its Somerset, New Jersey, distribution center (DC), one of 25 facilities in the company’s U.S. network. Productivity had plateaued at the location, thanks in large part to the way workers processed orders—traditionally, via manual pack stations. Leadership at the e-commerce-focused 3PL decided to address the problem with automation, and purchased a carton wrap machine from CMC Packaging Automation, which provides automated packaging solutions for a wide range of industries. The automatic carton packaging system creates custom boxes in a matter of seconds, speeding order processing and creating right-sized packages for each and every order.
Incorporating CMC’s automated packaging system made sense, but the timeline for implementation was less than ideal, according to Barrett’s leaders, who described the project in a case study published earlier this year. The system was scheduled for delivery to the New Jersey facility just two weeks before Black Friday weekend, leaving little time for the 3PL to get up to speed and keep up with prime peak season demand.
“It was a fairly complex integration,” said David Lynch, Barrett Distribution’s director of IT, in the case study. “It wasn't something our in-house [IT] talent would be able to pick up and run with right away.”
So Barrett turned to robotics integration firm SVT Robotics and its Softbot Platform to get the system up and running in time for the holiday weekend. Softbot is a technology-agnostic integration platform that allows companies to connect any robot to any enterprise system for any task; essentially, the cloud-based application allows companies to deploy solutions quickly and easily, without the need for in-house or outside IT professionals to develop and execute a software integration process, which can take weeks or months, according to Lynch.
“We were able to have our IT team stay focused on some of the innovations and things we needed for the rest of the business, and not be distracted by development of the integration,” he explains. “And then, after that initial integration, it's pretty hands off. For us, that was a big deal.”
SVT helped the facility integrate the CMC system in time for peak, without any service downtime. Among the immediate benefits, Barrett reduced its order turnaround time from three days to one, while also improving inventory accuracy and picking. The system has also reduced the need for temporary help during peak shipping times and has simplified the onboarding process for new hires.
And importantly, the carton wrap system has sustainability benefits: The creation of custom-sized boxes helps minimize waste by reducing excess packaging and avoiding filler materials—both of which are common to e-commerce operations. And CMC’s system is designed to use 100% recycled paper.
Reusables done right
It seems that everywhere you turn, companies are touting their efforts to reduce, reuse, and recycle their way to a greener supply chain.
Logistics-as-a-service platform Fillogic is one such company, announcing earlier this year that it is partnering with reusable packaging provider Returnity to offer reusable, eco-friendly packaging for its customers. Fillogic—which services the middle mile with micro-distribution hubs for retailers and brands—will offer its customers the latest version of Returnity’s Last Box, a reusable shipping box that replaces standard corrugated cardboard boxes used to ship products between distribution centers, stores, and back. The Last Box holds 50 pounds or more and typically lasts 40 to 50 shipping cycles. It’s made from material provided by Renegade Plastics, a maker of sustainable coated fabrics that serve as an alternative to PVC-coated plastics.
The Last Box helps retailers and brands save money, improve operational efficiency, and lower the environmental impact of their packaging, according to Fillogic.
“By switching to these recyclable boxes with Renegade Plastics and Returnity, we encourage reuse and recycling, helping our customers to be even more proactive in their sustainability efforts,” Bill Thayer, Fillogic’s founder and CEO, said in a statement announcing the partnership.
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”