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.
Business leaders are looking at all aspects of their operations to find ways to become more environmentally friendly these days, from energy and water usage in their facilities, to fuel consumption in their transportation networks, to the types of paper and packaging they consume across their operations. Experts say packaging is an especially hot topic, and they point to the growing ranks of businesses seeking sustainable solutions for product transport—the boxes, trays, pallets, and containers used to move products through their supply chains.
Demand for reusable transport packaging (RTP), as it’s known, increased 66% in 2020 and was expected to rise 88% in 2021 on its way to even higher levels this year, according to the Reusable Packaging Association (RPA), which published its first annual “State of the Industry” report on RTP in late 2020 and plans to release new data later this year. Consumers’ concern for the environment and the growing use of automated equipment throughout the supply chain were driving forces cited at the time, and they continue to be key motivators, according to Norm Kukuk, president of reusable packaging manufacturer Orbis and a member of RPA, which represents both suppliers and users of reusable packaging.
“We are seeing more interest, absolutely,” says Kukuk, emphasizing the increased demand for reusables in the food, medical, and pharmaceutical industries, which have also been major adopters of automated material handling equipment. “Our plastic packaging is high tolerance [so it can be used more easily] on conveyors and in automation. Because of that, [plastic] pallets and handheld totes are seeing more demand.”
But plastic isn’t the only reusable getting attention. Metal and wood factor into it as well, according to RPA, which defines reusable transport packaging solutions as those made from durable materials designed for multiple uses in rigorous operations and logistics systems. They stand in contrast to “one-way” packaging solutions, such as corrugated boxes and containers, which are designed for a single use before being recycled or tossed in a landfill. Reusable transport packaging represented a little more than 20% of the total global packaging market in 2020, also according to RPA, a figure that is rising as business customers and consumers alike seek to become part of the circular economy.
“These packaging products are designed for lasting use in a system that ensures their effective recovery and return for continuous purpose,” according to RPA. “Reusable transport packaging products are largely designed for business-to-business applications, although the growth of e-commerce and home delivery applications is opening opportunities for the effective use of reusable packaging for transporting merchandise to households” as well.
MAKING A ROUND TRIP
The goal of reusable transport packaging is to replace one-way solutions with those that can be used multiple times. Pallets are a case in point. Both wood and plastic pallets can be reused, and increasingly, the plastic variety are being used over and over again in food and beverage operations, often because they are easy to clean and are less prone to contamination, according to Kukuk. Third-party logistics service providers (3PLs) are investing more in this type of reusable packaging as well, he says.
“Our goal is to replace limited-use with high-volume-reuse packaging,” says Kukuk, adding that Orbis’ plastic pallets, in particular, are designed for the circular economy—where they’re used as many times as possible. It’s all part of a broader effort to develop a “circular supply chain,” in which the reusables are returned to the point of origin to be refilled and sent out again. In other models, reusables are managed by a third party that pools pallets, containers, and other reusables and then readies them for reuse by other partners in the pooling system.
The frequency of reuse varies. Pallet lifespan, for instance, largely depends on how the unit is used, and manufacturers of both the plastic and wood varieties tout the virtues of whichever type they make. Kukuk says one of Orbis’ plastic pallets recently underwent testing at the Virginia Tech Center for Packaging and Unit Load Design and was found to have a lifespan of more than 400 cycles, for instance. Meanwhile, experts at the National Wooden Pallet & Container Association note that wood is the only 100% renewable and recyclable reusable product available, and that wooden pallets still dominate the market. But no matter where a company stands on the issue, both products fit the bill as reusable transport packaging and can become part of a company’s environmental sustainability story—especially as environmental, social, and governance (ESG) initiatives gain prominence in supply chains.
“Our customers have ESG [objectives] that they are committed to, [and] we are helping them understand how reusable packaging can help them meet those goals,” Kukuk explains, noting that Orbis recently hired a sustainability director to advance those efforts.
A separate industry study on the demand for returnable transport packaging underscores those sentiments. A March 2023 report from the market research firm Future Market Insights estimated that the returnable transport packaging market would hit nearly $28 billion this year and rise to nearly $46 billion over the next 10 years, primarily due to an increased focus on reuse and recycling worldwide, ongoing demands to reduce waste, and a push to reduce the utilization of single-use packages in favor of the round-trip variety. The report cites the retail, food and beverage, logistics, chemicals, and building and construction sectors as key market drivers.
A CASE IN POINT
A recent sustainable packaging project by the materials science company W.L. Gore & Associates illustrates the ways in which companies are trying to reduce their environmental impact by rethinking the way they transport goods. Gore—which is best known for its waterproof, breathable Gore-Tex fabrics—switched from using single-use cardboard containers to transport large, bulky rolls of one of its products to using reusable metal racks. Ken Staz, the company’s U.S. regional logistics operations leader, presented details of the project at the recent annual meeting of the Warehousing Education and Research Council (WERC), a warehouse industry trade group.
Staz explained that the previous shipping method required customers to either discard or recycle the cardboard boxes once the product was received—taking the disposal decision out of Gore’s hands. To gain more control over the process, Gore built a prototype of a reusable metal shipping rack that could accommodate the 240-pound rolls of product. Once the product has been removed, the racks can be broken down at the customer location and shipped back for re-use. Today, Gore is using the racks for international shipments, which are handled by the company’s third-party logistics service provider. The 3PL manages the labeling and tracking of the racks for shipping as well as sorting, inspecting, and restocking the racks at Gore’s facilities after they’ve been returned.
Staz told attendees the project will achieve a return on investment (ROI) in just over three years and has yielded annual cost savings as well.
Above all, he says, it reinforces the company’s desire to be kinder to the environment and demonstrates its willingness to take on projects aimed at meeting that goal.
“Today, sustainability is more front of mind than it has been historically,” he told attendees.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.