Future of Sustainable Packaging for Retailers and the Logistics Industry

Future of Sustainable Packaging for Retailers and the Logistics Industry

By Tobias Maier, CFO DHL Global Forwarding Middle East & Africa

E-commerce packaging waste is a mounting problem today. The biggest culprit behind the large quantities of waste in the industry is the widely used plastic shrink wrap that secures cartons on pallets and protects packages in transit.

Because the nature of online purchases calls for many layers of packaging to protect them during shipping, it is nearly impossible to eliminate.

In addition, return rates for items bought online remain quite high, which means multiple purchases of the same item, leading to more plastic packaging waste. New food and fitness fads are also amplifying the problem.

As meal kits become more popular, there is a growing trend of bubble-wrapping fruits to prevent blemishes and insulating meats with single-use dry ice or gel-filled ice packs, both of which are a major contributor to packaging waste.

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Against this backdrop, solving the problem of how to reduce and manage plastic waste is a complex and challenging task. It doesn’t help that there is no recycling standardization.

Despite these hurdles, many brands and logistics companies are leading the push for greener packaging solutions to address the negative consumer sentiment toward plastic and packaging waste. Getting it right will unlock an exciting revolutionary phase for supply chains across all industries.

A fundamental change to packaging technologies, materials and processes in the supply chain could potentially shape the future of packaging and the circular economy. This will be critical to keep pace with the anticipated boom and rise of e-commerce.

Retailers are exploring new technologies, materials and designs, to make packaging more sustainable, including biobased or biodegradable packaging, or even packaging that is edible.

This includes starchor corn-based dissolvable foam pellets, or packaging containers made from tree pulp, bamboo, mushroom, seaweed, or even‘plastic’ made from sugarcane. However, higher costs still hinder the widespread adoption of these types of green packaging materials.

Brands must understand that not every sustainable packaging solution has to be high-tech and costly to be effective. This is particularly relevant as small ecommerce businesses often don’t have the resources or the demand to justify investing in large-scale solutions.

One of the most impactful and cost-effective solutions is to adapt existing practices to promote sustainability and draw attention to the overuse of single-use packaging.

For instance, some companies have begun to adopt reusable packaging and initiate rewards programs to encourage customers to return packaging, which can be later recycled, upcycled, or repurposed.

Others are offering customers the option to group orders into a single delivery.Many online shoppers don’t mind the slightly increased delivery time if it means reducing environmental impact.

Brands are also responding to consumer demand – particularly among Millennials and Gen Z – for more sustainable solutions by offering the choice to have their order shipped in a pre-used cardboard box that is still in a fully functional condition.

Not only does this give customers the chance to make environmentally-conscious shopping choices, but it also reduces the amount of waste caused by shipments on an individual basis by at least 50%.

For companies that can afford to harness the power of automation, there are many exciting opportunities to reduce their packaging footprint. Poor packaging utilization has been a persistent issue in the supply chain, where parcels may contain up to 40% of air.

This can be addressed through data-driven solutions.For instance, DHL uses an algorithmic optimization tool for item-level dimensions and 3D models to determine a suitable number of standard-size cartons that maximizes carton and pallet utilization in its warehouse operations.

Instead of paper labels, companies are producing smart labels using technologies such as organic light-emitting diode (OLED) and e-ink printing which produce less waste and can quickly provide real-time reports on the conditions of a package in transit.

It also transmits a warning to allow any damaged items to be checked or replaced in the supply chain before it reaches the end customer, thus reducing transportation costs and the carbon emissions as a result of a wasted delivery.

Country-level initiatives to revamp packaging design in favour of sustainable alternatives are also becoming more commonplace. For instance, the UAE has announced its plans to ban single-use plastic from next year, including food packaging.

It also plans to prohibit the import of plastic cutlery, drinks cups, styrofoam and boxes by 2026.

This is a tremendous step that will not just reduce unnecessary waste but will also build consumer awareness in a market with a thriving ecommerce industry. No doubt there will be a period of adjustment as consumers learn to adapt to new processes.

But as more businesses look for new ways to respond to rising consumer demand for sustainable practices, they will overcome the initial hurdles, and discover added value for both their customers and their company.

Read More: Need to Get Everybody Involved to Get the Sustainability Ball Rolling

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