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Decarbonizing Commerce - Issue #2

Decarbonizing Commerce - Issue #2

Empty Box Space Will Be Responsible For Billions Of Tons Of Emissions Over The Next Decade

Keith Anderson
September 25, 2023

Decarbonizing Commerce

Read time: 4 Minutes

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Empty Space Will Be Responsible For Billions Of Tons Of Emissions Over The Next Decade (Yes, Really)

There is a level of excitement whenever a big package arrives at your door. Especially if you can’t remember what you ordered that would require such a large box. Then, there is an equal level of disappointment when you open it to discover the tiny USB cord you ordered is inside with over a dozen air pillows and some Styrofoam packing pellets for good measure.

You may be surprised to learn that there is a Reddit forum with almost 20,000 members, with the sole purpose of having “[a] place to post examples of a product you've acquired that uses entirely too much packaging.”

My personal favorite:

(If you want to go down this particular rabbit hole you can access it here: https://www.reddit.com/r/EgregiousPackaging/)

Besides the time lost pondering “Why did they use such a big box for such a small package?”, there is a measurable cost to companies using poor packaging practices. All that empty space in the box still must be transported.

You “Cube Out” Before “Weighing Out”

The average box in the supply chain is 20%-40% bigger than it needs to be, which results in 73% of single trailer trucks transporting loads at least 10,000 pounds below their maximum allowable weight. The same is true for double trailers as well, coming in a bit lower at 62% of capacity. This is a direct result of poor packaging practices and outdated logistics infrastructure.

Retailers and brands lack of attention to the ‘empty space’ problem is having a huge impact.

Freight and logistics are responsible for up to 10% of annual emissions. This means that decisions based on outdated fulfillment models could result in billions of tons of Scope 3 Emissions and packing waste over the next decade.

This trend is only going to get worse. The explosion in Ecommerce is expected to double the number of parcel shipments by 2025 compared to 2019 levels. This means that environmentally oriented-packaging practices are no longer a luxury for environmentally-minded companies.

The good news is that not only are modern solutions effective at reducing emissions, but they are also profitable for the businesses that choose to use them.

Case Study: Walmart and Packsize Collaboration

Packaging specialist Packsize has developed an on-demand box machine, dramatically called the Ultra5. They have partnered with Walmart, installing the technology at the retail giants’ four next-gen fulfillment centers. Besides having a pretty cool name, the machine can “right size” up to 600 boxes an hour.

This decreases the amount of packing waste, but more importantly, directly solves the ‘empty space’ problem.

Walmart is able to fit up to a third more box onto its trailers, which just so happens to allow most trucks to weigh out before they cube out. This allows for faster delivery of products which increases the customer experience and satisfaction. Other advantages that Walmart is seeing are:

A better unboxing experience for their customers
Lower packaging material and labor costs
Less waste caused by oversized boxes
Eliminate void filler like plastic air pillows

Companies that adopt best packaging practices like Walmart will be able to cut their transportation, packaging costs, and emissions by 10% or more. If one in five companies adopted similar fulfillment strategies, it could result in up to 150 million tons of logistics emissions annually. This would mean up to a billion tons of emissions avoided over the next decade.

Tech-forward fulfillment strategies are a clear win for the environment and the bottom line of the companies that use them.

(Another added benefit these companies don’t find themselves being publicly shamed in front of thousands of potential customers)

You Don’t Have To Be Walmart To ‘Rightsize’ Your Business

Rightsizing does not apply only to packaging. It is a business philosophy that revolves around constantly striving to eliminate what you don’t need anymore. Unlike downsizing (which is typically viewed as a cost-cutting measure due to external forces), rightsizing is about efficiency. The goal is to streamline all of your business processes to reduce as much needless waste as possible.

The outgrowth of conservation, the inevitable result, is national efficiency - Gifford Pinchot

Economy-wide efficiency is an inevitable result of the push to decarbonize commerce. Retailers and brands that are early adopters of this trend will have a big advantage in positioning compared to their peers. This is due to access to data, as well as the goodwill generated by being first to market.

If your business does not have the capital to invest in expensive packaging infrastructure there are still ways you can implement best packaging practices. The easiest place to start is on the SaaS side.

Packaging Procurement Optimization Software allows companies to reduce lead time with localized supply sources, achieve efficient price benchmarking, and deploy data-driven analytics. The goal is to make current fulfillment processes more efficient versus adopting an entirely new ecosystem.

The Big Players Are Rewarding Package Efficiency

Amazon has built an entire ecosystem around moving toward efficiency in the supply chain. They promote brands that have adopted carbon-friendly packaging by awarding them with a “Compact by Design” Certification.

The distribution giant has embraced the idea that small moves can have big impacts at scale. Beyond rewarding its partners, Amazon has embraced rightsizing in its own practices by sometimes not using boxes at all. Instead, it is implementing a “ships in its own container” strategy, or SILOC.

Regardless of what strategy your company implements, you could be part of the solution that could avoid over a billion tons of emissions over the next decade. This will help reduce supply chain congestion and prolong the life of our roads by reducing the number of trucks required to transport the nation’s goods.

The ‘empty space’ problem can be solved if enough companies commit to rightsizing their businesses. The time to begin is now. Are you ready?

Keith’s Decarbonizing Digest

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Whenever you’re ready, here are additional resources to learn more:

Job board description - LINK
Premium research description - LINK
Directory of Commerce Climate Tech Solutions description - LINK
Podcast description - LINK