Building a Smarter and Cleaner Future for Retail, Together
Hardly a day goes by without the issue of waste appearing in the media. Its impact on the environment is becoming increasingly visible, driving changes in consumer behavior and threatening companies’ license to operate.
A Long-Term ‘Dual Challenge’ for Retailers
Retailers have been pushing hard to take on big issues like wasted packaging, plastic, food and carbon. It’s also clear they’re facing a long-term "dual challenge" as patterns of consumer demand evolve.
EY reports the volume of goods shipped will quadruple by 2050. As volume grows, the rise of convenience shopping, smaller shop formats, and e-commerce also leads to smaller order sizes and more frequent deliveries. Those developments will increase fulfillment complexity, transport miles and excess waste.
Bold Commitments and Collaborative Action to Reduce Supply Chain Impacts
The statistics around waste are astounding. For example, National Geographic reported that 91 percent of plastic isn’t recycled. But companies (and consumers) worldwide are taking note, and it’s why many retailers are making bold commitments in launching initiatives to cut the environmental impact of their operations.
What’s impressive about these initiatives is their depth and breadth. Consider Walmart’s Project Gigaton or Kroger’s Zero Hunger, Zero Waste campaign. Both retailers aim to collaborate with their customers and manufacturers to have a larger impact than they can have themselves — causing other retailers to think differently about sustainability.
It’s also why Walmart is embracing the concept of a circular economy and asking suppliers to keep re-use in mind. The retailer has already enlisted more than 1,000 suppliers to join Project Gigaton, and together they have conserved more than 93 million metric tons of emissions within the first two years. The same trend is at play in Target’s commitment to work with peers to address common challenges and achieve zero waste.
Building a More Sustainable Supply Chain
So how can retailers spot opportunities to work together for smarter and more sustainable supply chains? The answer lies in using data to identify bottlenecks, then developing new models to fix them.
Walmart Canada took this approach, discovering an operational inefficiency and acting on it. All 400 Canadian stores needed to remove empty wooden racks from their respective gardening departments, so the chain sought a solution with one of its third-party suppliers. Through understanding its logistics network, Walmart Canada unearthed an empty leg of its truck routes that could be used to divert the waste to nearby recycling facilities. Since the plan began, Walmart Canada has transported more than 2,000 tons of plant racks to recycling facilities, repurposing them into chips and sawdust for farm animal bedding.
Logistics: A Powerful Part of the Solution
Logistics are a problematic source of cost and emissions for businesses. Every year, U.S. trucks drive 50 billion miles without cargo, or 28 percent of total distance traveled, according to The Economist. Those wasted and empty truck miles increase fuel expenditure, CO₂ emissions and delivery times. Suppliers and retailers across North America agree that collaboration is the key to saving wasted truck miles, and that advanced data analysis has a role to play.
To mitigate this impact, some companies have leveraged collaborative transportation solutions. Using lane matching software to identify common transport flows, companies can share trucks to almost eliminate inefficient partial loads and wasted miles. My company, CHEP, adopted such a solution several years back; so far, it’s saved more than 38 million miles of empty journeys, avoided 53,000 tons of CO₂ emissions, and saved participants more than $9 million — enough to realize a larger impact can still be made.
How We Can All Work Toward a Zero-Waste World
It’s important to continue creating new ways to bring companies together to tackle big, shared challenges like eliminating waste, eradicating empty transport miles, and cutting out inefficiencies. By drawing on holistic data and insights, we can not only save retailers time, money and resources, but also unlock value for society.
George Brehovsky is director of customer solutions at CHEP, a global leader in managed, returnable and reusable packaging solutions serving many of the world's largest companies in sectors such as consumer goods, fresh produce, beverage and automotive.