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.
Parcel giant FedEx Corp. is automating its fulfillment flows by investing in the AI robotics and autonomous e-commerce fulfillment technology firm Nimble, and announcing plans to use the San Francisco-based startup’s tech in its own returns network.
The move is significant because FedEx Supply Chain operates at a large scale, running more than 130 warehouse and fulfillment operations in North America and processing 475 million returns annually. According to FedEx, the “strategic alliance” will help to scale up FedEx Fulfillment with Nimble’s “fully autonomous 3PL model.”
“Our strategic alliance and financial investment with Nimble expands our footprint in the e-commerce space, helping to further scale our FedEx Fulfillment offering across North America,” Scott Temple, president, FedEx Supply Chain, said in a release. “Nimble’s cutting-edge AI robotics and autonomous fulfillment systems will help FedEx streamline operations and unlock new opportunities for our customers.”
According to Nimble founder and CEO Simon Kalouche, the collaboration will help enable FedEx to leverage Nimble’s “fast and cost-effective” fulfillment centers, powered by its intelligent general purpose warehouse robots and AI technology.
Nimble says that more than 90% of warehouses today still operate manually with minimal or no robotics, and even those automated warehouses use robots with limited intelligence that are restricted to just a few warehouse functions—primarily storage and retrieval. In contrast, Nimble says its “intelligent general-purpose warehouse robot” is capable of performing all core fulfillment functions including storage and retrieval, picking, packing, and sorting.
For the past seven years, third-party service provider ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.
The logistics process automation provider Vanderlande has agreed to acquire Siemens Logistics for $325 million, saying its specialty in providing value-added baggage and cargo handling and digital solutions for airport operations will complement Netherlands-based Vanderlande’s business in the warehousing, airports, and parcel sectors.
According to Vanderlande, the global logistics landscape is undergoing significant change, with increasing demand for efficient, automated systems. Vanderlande, which has a strong presence in airport logistics, said it recognizes the evolving trends in the sector and sees tremendous potential for sustained growth. With passenger travel on the rise and airports investing heavily in modernization, the long-term market outlook for airport automation is highly positive.
To meet that growing demand, the proposed transaction will significantly enhance customer value by providing accelerated access to advanced technologies, improving global presence for better local service, and creating further customer value through synergies in technology development, Vanderlande said.
In a statement, Nuremberg, Germany-based Siemens Logistics said that merging with Vanderlande would “have no operational impact on ongoing or new projects,” but that it would offer its current customers and employees significant development and value-add potential.
"As a distinguished provider of solutions for airport logistics, Siemens Logistics enjoys a first-class reputation in the baggage and air-cargo handling areas. Together with Vanderlande and our committed global teams, we look forward to bringing fresh impetus to the airport industry and to supporting our customers' business with future-oriented technologies," Michael Schneider, CEO of Siemens Logistics, said in a release.
I recently came across a report showing that 86% of CEOs around the world see resiliency problems in their supply chains, and that business leaders are spending more time than ever tackling supply chain-related challenges. Initially I was surprised, thinking that the lessons learned from the Covid-19 pandemic surely prepared industry leaders for just about anything, helping to bake risk and resiliency planning into corporate strategies for companies of all sizes.
But then I thought about the growing number of issues that can affect supply chains today—more frequent severe weather events, accelerating cybersecurity threats, and the tangle of emerging demands and regulations around decarbonization, to name just a few. The level of potential problems seems to be increasing at lightning speed, making it difficult, if not impossible, to plan for every imaginable scenario.
What is it Mike Tyson said? Everyone has a plan until they get punched in the mouth.
It has never been more important to be able to pivot and adjust to challenges that can throw you off your game. The report I referenced—the “2024 Supply Chain Barometer” from procurement, supply chain, and sustainability consulting firm Proxima—makes the case for just that. The company surveyed 3,000 CEOs from the United Kingdom, Europe, and the United States and found that the growing complexities in global supply chains necessitate a laser-sharp focus on this area of the business. One example: Rightshoring, which is the process of moving business operations to the best location, means companies are redesigning and reconfiguring their supply chains like never before. The study found that large numbers of CEOs are grappling with the various subsets of rightshoring: 44% said they are planning to or have already undertaken onshoring, for instance; 41% said they are planning to or have undertaken nearshoring; 41% said they are planning to or have undertaken friendshoring; and 35% said they are planning to or have undertaken offshoring.
But that’s not all. CEOs are also struggling to deal with the rise of artificial intelligence (AI) and its application to business processes, the potential for abuse and labor rights issues in their supply chains, and a growing number of barriers to their companies’ decarbonization efforts. For instance:
Nearly all of those surveyed (99%) said they are either using or considering the use of AI in their supply chains, with 82% saying they are planning new initiatives this year;
More than 60% said they are concerned about the potential for human or labor rights issues in their supply chains;
And virtually all (99%) said they face barriers to decarbonization, with 30% pointing to the complexity of the work required as the biggest barrier.
Those are big issues to contend with, so it’s no surprise that 96% of the CEOs Proxima surveyed said they are dedicating equal (41%) or more time (55%) to supply chain issues this year than last year. And changing economic conditions are adding to the complexity, according to the report.
“As inflation fell throughout last year, there were glimmers of markets stabilizing,” the authors wrote. “The reality, though, has been that global market dynamics are shifting. With no clear-set position for them to land in, CEOs must continue to navigate their organizations through an ever-changing landscape. Just 4% of CEOs foresee the amount of time spent on supply chain-related topics decreasing in the year ahead.”
Simon Geale, executive vice president and chief procurement officer at Proxima, added some perspective.
“It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads,” he wrote. “The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
Perhaps the extra focus on supply chain issues will help organizations improve their ability to roll with the punches and overcome resiliency challenges in the year ahead. Only time will tell.
Investing in artificial intelligence (AI) is a top priority for supply chain leaders as they develop their organization’s technology roadmap, according to data from research and consulting firm Gartner.
AI—including machine learning—and Generative AI (GenAI) ranked as the top two priorities for digital supply chain investments globally among more than 400 supply chain leaders surveyed earlier this year. But key differences apply regionally and by job responsibility, according to the research.
Twenty percent of the survey’s respondents said they are prioritizing investments in traditional AI—which analyzes data, identifies patterns, and makes predictions. Virtual assistants like Siri and Alexa are common examples. Slightly less (17%) said they are prioritizing investments in GenAI, which takes the process a step further by learning patterns and using them to generate text, images, and so forth. OpenAI’s ChatGPT is the most common example.
Despite that overall focus, AI lagged as a priority in Western Europe, where connected industry objectives remain paramount, according to Gartner. The survey also found that business-led roles are much less enthusiastic than their IT counterparts when it comes to prioritizing the technology.
“While enthusiasm for both traditional AI and GenAI remain high on an absolute level within supply chain, the prioritization varies greatly between different roles, geographies, and industries,” Michael Dominy, VP analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results. “European respondents were more likely to prioritize technologies that align with Industry 4.0 objectives, such as smart manufacturing. In addition to region differences, certain industries prioritize specific use cases, such as robotics or machine learning, which are currently viewed as more pragmatic investments than GenAI.”
The survey also found that:
Twenty-six percent of North American respondents identified AI, including machine learning, as their top priority, compared to 14% of Western Europeans.
Fourteen percent of Western European respondents identified robots in manufacturing as their top choice compared to just 1% of North American respondents.
Geographical variances generally correlated with industry-specific priorities; regions with a higher proportion of manufacturing respondents were less likely to select AI or GenAI as a top digital priority.
Digging deeper into job responsibilities, just 12% of respondents with business-focused roles indicated GenAI as a top priority, compared to 28% of IT roles. The data may indicate that GenAI use cases are perceived as less tangible and directly tied to core supply chain processes, according to Gartner.
“Business-led roles are traditionally more comfortable with prioritizing established technologies, and the survey data suggests that these business-led roles still question whether GenAI can deliver an adequate return on investment,” said Dominy. “However, multiple industries including retail, industrial manufacturers and high-tech manufacturers have already made GenAI their top investment priority.”