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Avoid a Billion Tons of CO2 by Rightsizing packages

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Avoid a Billion Tons of CO2 by Rightsizing packages

  1. 1. Small Items Big Boxes Massive Impact RIGHTSIZING: HOW A RELATIVELY SIMPLE SOLUTION COULD ELIMINATE OVER A BILLION TONS OF CO2 OVER THE NEXT DECADE ©2021 KEVIN J MIRELES 1
  2. 2. 2 Freight transportation and logistics contribute 8-10% of global emissions and are on pace to double emissions by 2050* Adopting existing technologies and packaging best practices could avoid over a billion tons emissions over the next decade * Image and data sourced from the Global Logistics Emissions Council Framework for Logistics Emissions Accounting and Reporting ©2021 KEVIN J MIRELES
  3. 3. Today, poor packaging practices result in the average box being 20-40+% bigger than required ©2021 KEVIN J MIRELES 3 Generating huge amounts of easily avoidable C02, other air pollutants and packaging waste 3 drill bits 3 boxes
  4. 4. And ecommerce growth will make everything worse! ©2021 KEVIN J MIRELES 4 36 103 140 225 0 50 100 150 200 250 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Annual Number of Parcel Shipments* Parcels Shipped (Billions) The number of parcel shipments and the e-commerce packaging market from 2019 to 2025 is expected to double * Source = 2019 Pitney Bowes Parcel Shipping Index, with a 40% spike added for 2020, and then a 10% CAGR afterwards
  5. 5. Driving inefficiency, waste & GHG emissions in tandem Poor Packaging Practices Transportation Impact 20-40% Increase in miles driven & flown Building & maintaining extra aircraft &vehicles Larger than needed aircraft & vehicles Energy required to move additional package weight Packaging Impact Additional trees cut Extra packaging manufacturing energy & pollution Additional packaging waste Increased dunnage to fill empty space ©2021 KEVIN J MIRELES 5
  6. 6. Optimizing packaging practices could easily reduce global logistics emissions between 15 & 150 million tons annually Mode 2015 Total C02 Amount Million Tons* % Reduction Reduction in Tons Conservative Optimistic Conservative Optimistic Air 174 -5% -20% (8,700,000) (34,800,000) Sea 783 0 -1% - (7,830,000) Road 1,798 -0.5% -5% (8,990,000) (89,900,000) Total (17,690,000) (132,530,000) ©2021 KEVIN J MIRELES 6 More analysis is required to better quantify the potential reductions in C02 from transportation, plus calculate C02 emissions from manufacturing packaging, additional trucks, planes, etc. Or Between 180M and 1.3B tons over the next decade *Global Logistics Emissions Council Framework
  7. 7. Cargo-plane utilization on a weight basis has already dropped below 50% on average, and is expected to get even worse! ©2021 KEVIN J MIRELES 7 “The surge in e-commerce traffic will further decrease the average density of the cargo flown.” Niall van de Wouw, Managing Director CLIVE in AirCargoWorld Today Future The problem has gotten so bad that The International Air Cargo Association wants to change to a volumetric model to make aircraft utilization look better! In theory, could increase air cargo capacity by up to 50% without adding any new flights, but realistically increase by at least 20%.
  8. 8. In the US, trucks almost always cube out before they weigh out ©2021 KEVIN J MIRELES 8 *Twin 33 Foot Truck Trailers: Making U.S. Freight Transport Safer And More Efficient Commissioned By Americans For Modern Transportation “62 percent of twin trailer trucks are loaded at 10,000 pounds or more below the maximum allowed weight of 80,000 pounds. For single-trailer trucks, the percentage is even higher: 73%.” - Ronald R. Knipling, Ph.D. *
  9. 9. Which is why parcel & LTL carriers have advocated for 33-ft trailers which offer 18% more space than the current 28-ft trailers ©2021 KEVIN J MIRELES 9 Since the expectation is that rightsizing packages should reduce the average package/box size by 20-40%, rightsizing could deliver up to two times the benefit for the parcel & LTL industry. Courtesy of Americans for Modern Transportation
  10. 10. Just shrinking 30B parcels, or about 20% of the ~140B shipped in 2020, from 10X10x10 to 9X9X9 would eliminate the equivalent of… ©2021 KEVIN J MIRELES 10 Or enough trailers to stretch from Los Angeles to Hong Kong and back! 2.8M 28-ft Trailers
  11. 11. Since trade flows tend to be lopsided, each full outbound trip often results in one less empty trailer trip back so get 2X savings ©2021 KEVIN J MIRELES 11 Ships, planes & trucks leave net export locations like China to Rest of World, or Los Angeles to rest of United States full And come back empty
  12. 12. In addition, shrinking parcel size enables smaller delivery vehicles Thereby reducing: ◦ Fuel usage ◦ Pollution ◦ Traffic ◦ Parking ◦ Etc. ©2021 KEVIN J MIRELES 12 Plus, it reduces the costs associated with switching to electric delivery vehicles, since can trade down to smaller vehicles
  13. 13. Technology & techniques exist today to reduce shipment size Packaging Postponement* Postponing packaging to much later in the supply chain in order to minimize the weight, space and damage while maximizing labelling, etc. flexibility ©2021 KEVIN J MIRELES 13 Rightsizing Technologies Packaging software and hardware that automatically selects the ideal box size or creates a box on demand in order to minimize empty space & damage Logistics-Optimized Product & Packaging Design* Designing products & packaging to maximize trailer/container and pallet utilization *Kevin Howard is the guru of these two concepts
  14. 14. Logistics-optimized packaging & design ©2021 KEVIN J MIRELES 14 Optimizing products to maximize fit on pallets and in truck trailers, ocean containers, etc. can drive massive increases in utilization. In the example below, a 14% reduction in package size resulted in a 137% increase in the number of boxes that fit within the same space, from 27 to 64 3 inches
  15. 15. Packaging postponement ©2021 KEVIN J MIRELES 15 Designing products and supply chains so you can ship items with minimal to no packaging as close to the end customer as possible so you can minimize the space and weight associated with the packaging Ship items from origin with minimal to no packaging 4X4X4 = 64 Once close to recipients, then insert into final packaging 3X3X3 =27 Hewlett Packard was able to more than double the number of printers in the same space by implementing packaging postponement and designing their products and packaging to maximize space utilization!
  16. 16. Rightsizing technologies ©2021 KEVIN J MIRELES 16 Rightsizing Technologies Software-only Identifies right-size box to select Easier to deploy 15-40% reduction in package size Box on Demand Creates optimally- sized box for that specific item More challenging to deploy 20-80% reduction in box size Technology that either selects the best fitting box for the item being shipped, or that creates an optimally sized box
  17. 17. Rightsizing example ©2021 KEVIN J MIRELES 17 17 CEO Internet Fusion Group in Quadient testimonial Cardboard Transportation Trees If 100K more similar businesses adopted, would eliminate 388M ft3 of carboard, 900K truckloads & save 560M trees!
  18. 18. Despite benefits, adoption has been limited ©2021 KEVIN J MIRELES 18 Less than 5% Adoption Lack of understanding impact C02 Calculations based on weight not size No one’s ever calculated national & global impact Lack of Awareness of solutions Newer Practices & Technologies Smaller companies with limited marketing Lack of Pressure No public policies to force right sizing Limited/no advocacy Complexity Requires alignment across multiple organizations & disciplines Why?
  19. 19. Need national/global organizations to help drive changes ©2021 KEVIN J MIRELES 19 Increase solutions & Adoption Quantify Impact Incorporate impact of volume and packaging practices in sustainability calculations Calculate global impact of poor packaging practices Drive awareness of problem, opportunity & solutions Evangelize issues, benefits & solutions to government and business leaders Increase focus and investments in space Increase Pressure to act Drive public policies such as taxes on packaging & penalties for failing to rightsize Launch public pressure campaigns Create benchmarks and scorecards to measure and hold actors accountable Simplify adoption Bring key players from across the supply chain to develop industry-wide standards How
  20. 20. Ultimately, success will require one or more organizations to start investing the resources required to make progress Provide funding or resources to: 1. Develop new methods that incorporate volume in C02 emissions calculations 2. Develop new models that enable organizations to measure impact of their packaging practices to environment, productivity and shipper finances 3. Quantify total impact of poor packaging practices at global and national levels 4. Develop metrics and scorecards to measure, compare and hold key players accountable Launch education and public-policy campaign to drive: 1. Awareness, investment and adoption of enhanced packaging techniques and technologies 2. Public policies such as taxes on packaging & penalties for failing to rightsize, and tax credits for investing in new technologies 3. Commitments from key players regarding the adoption of packaging best practices 4. Development of industry-wide standards, best practices and certifications ©2021 KEVIN J MIRELES 20
  21. 21. About the author and the project This is a passion project that came about after I received the iPhone pictured. I measured the item and the box, and was shocked to discover that box was about 90+% empty space. I then used Excel to calculate the annual cubic feet resulting from shipping millions, and was blown away by the sizes involved. As a former reporter with 15 years of logistics and e- commerce experience who loves solving really hard problems, I was hooked by the opportunity to make an impact at global scale. Since then I’ve been working to understand the root causes, quantify the opportunity, identify potential solutions, find collaboration partners, and ultimately, define and execute the steps required to drive progress. And so I hope you’ll join me on this important journey! Yours truly, Kevin J. Mireles ©2021 KEVIN J MIRELES 21

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