The impacts of shipageddon will extend far beyond the processing of the glut of holidays packages. Are companies prepared to fulfill the surge in orders? And are packaging companies ensuring both product safety and the planet’s longevity?
As we brace for an exceptionally busy e-commerce holiday shopping season, Jeff Chalovich, Chief Commercial Officer and president of Corrugated Packaging at WestRock, discusses how the fiber-based packaging solutions company is helping its customers fulfill orders not only swiftly, but sustainably.
Here in the US, we love coining words that take the seemingly mundane to the next, terrifying level (hello, “snowpocalypse”). And, in keeping with this trend — as we slide into a unique holiday season, thanks to COVID — people across the country are bracing for “shipageddon.”
Coined by Scott Silverman of Retail Geek, shipageddon refers to the anticipated delivery delays that parcel companies such as FedEx and UPS will be facing with the significant surge in holiday packages shipping this year.
But the broad-reaching implications of shipageddon extend far beyond the moment when the glut of holidays packages are en route. How are consumer packaging goods companies prepared to fulfill the surge in orders? And, how are packaging companies designing both product and corrugated shipping boxes in a manner that ensures the product’s safety and the planet’s longevity? Shipageddon doesn’t just raise concerns about deliverability; it raises concerns about sustainability.
At WestRock, an Atlanta-based fiber-based packaging solutions company (and one of North America’s largest recycling networks), we’ve been pondering how we can help customers skirt delivery disaster and minimize the havoc shipageddon might wreak in terms of supply and demand. How are we helping our customers fulfill orders not only swiftly but sustainably? Quite simply: by continuing our focus on Connecting People to Products safely and sustainably with solutions that are right-sized, renewable, recyclable and compostable.
The challenge: exponential e-commerce growth
For the 2020 holiday season, people aren’t doing the bulk of their shopping on Main Street, but rather online. In fact, according to Accenture, 75 percent of consumers plan to shop online for at least some of their holiday gifts (up a whopping 65 percent from last year); and a little less than half plan to do all of their holiday shopping online. Fueled by our pivot to online purchases during the pandemic, consumers have cozied up more quickly than expected to e-commerce.
The look ahead coming out of Deloitte's annual holiday retail forecast? E-commerce sales will grow by 25-35 percent year-over-year during the 2020-2021 holiday season. And Adobe Analytics predicts that online sales this month will surge 33 percent year-over-year, to a record $189 billion.
In short, the expected e-commerce growth is unexpected, unparalleled and exponential.
All told, the reality is that, since many Black Friday deals went digital and launched well in advance of Thanksgiving, shipageddon set sail weeks ago. Thankfully, we and our customers were equipped with automated packaging solutions, which meant we were also equipped to swiftly and sustainably handle the surge.
The solution: speed, efficiency and sustainability — on demand
COVID-19’s impact on supply chain demands across the industry prompted leaders to embrace newly improved and highly efficient practices of business management. WestRock’s adoption of a “just-in-case” — rather than the familiar, “just-in-time” model — pushed us to lead in the e-commerce world and optimize our internal structure to prioritize and meet the needs of the customer.
The secret to a successful, sustainable e-commerce business is a resilient, yet nimble supply chain — prioritizing efficiency and sustainability via automated packaging solutions. Our customers came to us with a challenge: Help us reduce or eliminate void fill and reduce our overall packaging and shipping costs. Our right-sizing solutions not only solve those challenges, but they also provide our customers with a more sustainable package.
Customers often report that on-demand packaging systems improve their labor and factory logistics, too. Many customers report an increase in the number of direct-to-consumer shipments per day, reduction of floor space from stored corrugated boxes and cost savings from decreased waste — all of which help our customers win in e-commerce.
Sustainable from beginning to new beginning: contributing to a circular economy
Optimizing our supply chain to incorporate local forestry suppliers and recycling practices is vital to WestRock’s commitment to advancing a circular economy, and a key component of prioritizing a sustainable future.
Recycling existing products is an important step in WestRock’s process; and as one of the nation’s largest integrated recyclers, we bring a level of fiber expertise to the process that few companies can match. Once materials are collected for recycling, WestRock processes and recycles the fiber (fiber can be recycled 5-7 times) and puts it back into the manufacturing process, along with virgin fiber. Leveraging 18 recycling plants across the US, WestRock recycles 8 million tons of materials per year — exceeding our 5.5 million tons of recycled fiber consumption. Prioritizing connectivity in our core set of values, we also work to increase awareness of recyclability and educate consumers, alongside partners such as The Recycling Partnership.
In 2019, to help dispel the myth that corrugated pizza boxes are not recyclable, WestRock commissioned a study of the availability of pizza-box recycling programs in the US; we then conducted a subsequent study that concluded normal amounts of grease and residual cheese do not negatively affect manufacturing of new product from this recycled fiber. To further encourage pizza lovers to learn more — we launched a hub of information about proper pizza box recycling — in partnership with Domino’s.
When we consider how many boxes are heading out into the world these days — both of the shipping and the pizza varieties — prioritizing planet alongside production is key. WestRock is aiming to help companies battle — rather than brace for — shipageddon by streamlining their systems for greater efficiency and greater sustainability.