Wooden pallets may not be the most glamorous part of the global supply chain, but nothing gets moved around without them, and they are a huge opportunity for a circular economy.
The market leader in wooden pallets is a company called CHEP, which has 300 million assets in over 55 countries. It’s become something of a quiet hero in the burgeoning circular economy.
Reusing wood pallets can significantly reduce logging, which cuts down on GHG emissions and saves money. All of CHEP’s assets are rented, collected and reused; this saves a lot of virgin material, but the company also knew more could be done.
In June, CHEP’s parent company, Brambles, launched “Zero Waste World,” an initiative that will increase circularity and efficiencies of CHEP and its customers. It aims to decrease waste by increasing its range of reusable supply chain packaging options (which CHEP President Laura Nador explored in a keynote at SB’19 Detroit). The company will collaborate with customers that are shipping products in opposite directions to transport and reduce empty truck miles. By carefully tracking its assets, CHEP and Brambles leverage their data to reduce inefficiencies.
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We caught up with Jonathan North, Zero Waste World North America Program Lead at Brambles, to learn more.
Your company handles transportation solutions including providing wooden pallets, containers and crates. What role does this play in a circular economy?
Jonathan North: The CHEP business model is inherently circular. Our investment in high-quality, returnable assets (pallets, crates and containers) is a direct contributor to the circular economy, where these assets are reused and shared many times. We further prolong the life of these durable products through rigorous inspection, repair and washing procedures, which reduces the overall demand for raw material.
Do customers come to you first to save money or first to reduce their footprint?
JN: We believe that environmental and economic benefits go hand in hand. Typically, in our business model, more sustainable solutions cost the end user less money, so we can satisfy our customers’ supply chain needs from an environmental or an economic point of view. Having said that, it seems that the pendulum is now shifting more towards the environmental argument, which the Zero Waste World program strongly reinforces.
Image credit: CHEP
How are you using data about the flow of your containers around the world to help customers reduce resource use?
JN: We have access to a substantial amount of information about where and how goods are shipped throughout North America. This supply chain data, in combination with strong collaborations with our customers, helps us to identify opportunities to optimize these flows. We can now specifically focus on reducing waste, eradicating empty transport miles and cutting out other inefficiencies that help reduce resource use.
For companies that wish to reduce their footprint from logistics, what are some of the first places they should look?
JN: One major opportunity is to identify empty transport miles in the supply chain. This is one of the focus areas in Zero Waste World. Industry statistics indicate that there are as many as 50 billion empty truck miles driven each year in the US, equivalent to 28 percent of the total distance they travel. That represents a substantial opportunity for reducing a very important and relevant footprint.
Can you give us an example of how you collaborated with one or more customers using your data to reduce empty travel miles or increase efficiency?
JN: CHEP and JBS, a leading processor of meat and poultry, collaborated to eliminate almost 900,000 empty truck miles from its supply chain; and in doing so, also eliminated 3.3 million pounds of CO2 emissions. We are continually looking to collaborate with our partners to identify similar opportunities to increase the utilization of transportation equipment, benefiting both the bottom line and the environment.