Sustainability is a team sport, and 3PLs are perfectly positioned to help their customers achieve their sustainability and profitability goals.
Unfortunately, most 3PLs are clueless about the opportunity.
What’s ironic is that while most people think being green will increase costs, since logistics and packaging is all waste, if you cut your waste, you cut your costs and pollution.
So I was pleasantly surprised to review GXO Logistics, Inc. ESG report and see how they are integrating sustainability into their core offerings.
Two things I really liked are:
🌎Focus on empty-space minimization/densification
The average parcel is anywhere between 40 and 60% empty space or more, so minimizing empty space can slash your costs and environmental impact.
Unfortunately, too many 3PLs ignore this opportunity, as they actually make money from selling larger, more expensive packaging and from increased transportation costs, so it was great to see how GXO is implementing automated packaging systems to rightsize their shipments, and taking other initiatives to densify their customers’ supply chains.
For 3PLs, this can and should be a key opportunity to help your customers save money, improve their sustainability, and improve their clients’ customer experience as everyone hates receiving oversized boxes.
And customers need to demand space-utilization metrics at the package, pallet, and trailer level. Today, almost no one tracks this key metric, despite its massive impact on costs and emissions, so hats off to GXO for focusing on ways to maximize space utilization/density.
🌎 Embracing circularity as a new business offering
Embracing the circular economy as an opportunity to differentiate and generate new revenue by helping customers avoid the costs of disposing items that instead can be cleaned, repaired, refurbished, and ultimately resold!
3PLs are perfectly positioned to help their clients reduce their returns’ costs and environmental impact by reducing the number of items that go into the landfills – and turn those savings into new sources of revenue for themselves.
Ultimately, as the cost of disposal goes up and the costs to reuse goes down, the demand for circular services will increase.
The opportunity is being driven by new:
🌟Laws forcing companies to take more financial responsibility for the wastes they generate.
🌟Technology making disposition, cleaning, refilling, and reusing more affordable.
The combination will result in an explosion of reverse logistics and bottling/repackaging/resell services that 3PLs can offer.
Bottom line: 3PLs need to begin integrating sustainability as part of their core offerings, or they’re going to lose clients and new sources of revenue.