"We are Transporting too much Packaged Air"
The decarbonization of supply chains must be tackled by all companies that are supplied or deliver themselves. The shipping package can also make its contribution. In the view of logistics specialist Massimo Rossetti, optimization helps the environment and reduces costs.
In this interview, Massimo Rossetti, CEO and co-founder of Alpha Augmented Services AG, which is based in Switzerland, talks about potential savings in packaging. After more than 20 years of management experience in the European and American logistics industry, Rossetti wants to realize his vision of a sustainable and efficient supply chain - using cloud-based software and an algorithm developed in-house.
How can the retail industry become more sustainable?
The retail industry still has a lot of catching up to do when it comes to costs and sustainability in logistics. 90 percent of all goods shipments are not efficiently packed today, so material is wasted and "packed air" is transported. Transport capacities are not optimally utilized. Sustainability efforts often focus only on more environmentally friendly means and materials of transport and not on efficient packaging and capacity utilization.
What are the potential savings in terms of costs and CO2 emissions?
In our experience, savings of 20 percent are possible in shipping, storage, handling and material costs, and the reduction in CO2 emissions is also within this range. The key is to start optimizing shipping as early as the initial order processing stage.
Which product groups offer the highest savings potential?
Goods combinations that are later transported and stored on pallets, in cartons and containers are particularly suitable. Artificial intelligence can be used to determine the best one from several 1,000 packaging and shipping combinations. Different rectangular laptops, televisions, desktops and smartphones, for example, can be transported efficiently with the optimal configuration by computer, despite very different dimensions.
Does this approach reach its limits when it comes to sensitive goods?
No, because although more elaborate packaging is sometimes necessary, the products can often be packed more efficiently. For example, if a shipment is packed on 8 pallets instead of 10, fewer pallets are exposed to the stresses during transport. The more compact packaging also means that the products are better protected overall.
Do large retail chains optimize their capacities better?
Not necessarily. Large chain stores order globally and often have little control over how shipments are packed by the supplier. That's efficiency loss number 1. The transport chain then goes through distribution warehouses of the retail chains. From there, goods are reassembled and distributed according to the demand of each store. These pallets and the trucks are often also poorly utilized - efficiency loss number 2.
Do end customers even appreciate such optimizations?
Environmental aspects are increasingly playing a role. Unfortunately, customers are often fobbed off with compensation offers for the CO2 emissions caused. I am convinced that we should not compensate, but avoid directly. This is done through efficient logistics. Costs are also reduced in this way and speed does not suffer. This approach can be an argument for retailers to position themselves with their customers.