Packaging Solutions are as Important as Lower Emission Shipping for the Future Sustainability of the Global Automotive Supply Chain
All eyes are on the decarbonization of transport – including the trade option of choice, shipping – but for CHEP, global leader in sustainable supply chain solutions, the optimization of ocean containers using circular packaging solutions is as important
Shipping is the preferred means of transport when it comes to global trade, with around 90% of traded goods carried over the waves. Nowhere is this truer than in the automotive supply chain.
Shipping is also high on the global environmental agenda, representing 3% of total greenhouse gas emissions, but this figure could treble by 2050.
The amount of greenhouse gas emissions released by cargo ships is substantial. As such, the stakes are high to design fleets of zero-impact ships, with some automotive companies even taking matters into their own hands, like Renault and their partnership with Neoline.
Zero-impact ships would be a huge step towards protecting our oceans but is not the only way to make shipping more sustainable. Other answers lie in the supply chain, particularly as the amount of future goods to be transported is set to grow.
Optimized use of ocean containers
The maximized use of ocean containers when shipping automotive parts is not a new topic. In simple terms, the more optimized the container, the more optimized the overall transport costs.
However, as automotive suppliers also seek more sustainability in their supply chains, the question of container optimization has once again come to the fore. The chosen means of transporting goods heavily influences the carbon footprint attached to those individual goods.
Ocean shipping is not just cost effective, but also an environmentally sound choice as it is one of the least polluting options in terms of merchandise carried: 10 to 40g CO² emitted per metric ton of freight and per kilometer of transportation for modern ships versus 500g CO² for airplanes.
Loading ocean containers to their maximum capacity is therefore a direct route to greater sustainability, but we are still shipping lots of air.
The problem – and the answer – lies in packaging
There is still the propensity to use single-use cardboard packaging in the automotive supply chain. The considerable variation in sizes and the limited ability to stack only adds to the air being shipped, making for additional redundant space within the package itself.
Moreover, one-way cardboard packaging exposes contents to potential humidity, shocks, and additional handling. What can initially seem a wise financial option often incurs damaged stock or additional labor costs.
In an industry driven by lower costs, particularly with the rise of electric vehicles and the race to make them as affordable as a traditional Internal Combustion Engine (ICE) car, there is even a tendency to minimize the strength of this one-way cardboard packaging.
What other options are available to companies in the automotive supply chain?
Re-usable plastic containers – IsoBins and IcoQubes - provide much greater protection from potential damage incurred during transportation and can be used time and time again. Importantly, the biggest advantage of reusable plastic packaging is the higher cube utilization of ocean containers as they allow for a higher stacking height.
Based on the circular economy principles of re-use and recycle, many intra-OEM (Original Equipment Manufacturer) shipments are starting to favor this sustainable option, but widespread adoption is still slow.
The prohibitive cost of reverse logistics
Many companies are reluctant to invest in reusable plastic packaging because of the extra cost of returning their packaging to them after delivery.
This is where companies like the pooling and packaging solutions leader, CHEP Automotive, come in. Alongside reusing and recycling, another key tenet of a truly circular economy model is the notion of sharing.
To counter backhaul shipments in closed-loop operations, rather than companies investing in their own plastic containers, CHEP Automotive provides them via a global sharing concept and the continuous rotation of those bins around the globe.
CHEP’s containers are optimized, both in terms of size and stacking ability for both warehouses and the ship containers and offer the robustness and protection that cardboard simply can’t. Moreover, reusable plastic bins offer the potential to integrate technology to monitor interference, or simply rises in heat or humidity, all incredibly useful when transporting electronic equipment of value or delicate items such as batteries.
A holistic and global approach
Adopting circular models when it comes to packaging can dramatically reduce waste and allow for savings across the board. CHEP is driving sustainability in the automotive supply chain. With a presence on every continent, we offer our clients in-market expertise and support, as well as economies of scale in terms of our global pool of both packaging bins and users.