Circularity

In the context of circular packaging, plastic remains a significant concern. Over 90% of the 400.3 million tons of global plastics produced in 2022 was fossil-based. In the five preceding years, greener alternatives – mechanically recycled, chemically recycled, bio-based plastics, and carbon-captured plastics – increased only slightly from 8.4% to 9.4%. Targets for minimum recycled content in plastic packaging are under discussion – the Packaging and Packaging Waste Regulation (PPWR) of the European Union seeks 30% by 2030 and 50% by 2040 for contact-sensitive plastic packaging, excluding single-use plastic beverage bottles. Compostable plastic packaging and packaging with less than 5% plastic content are also included in the targets.

Existing solutions like refillable options for consumer goods and compostable, bio-based packaging in the e-retail and fashion sectors demonstrate the potential of circular packaging but are not widely implemented. What’s needed are convenient and incentivized takeback processes that are as convenient as discarding the packaging.

In logistics, implementation of circular packaging requires comprehensive visibility of supply chain processes to ensure the appropriate distribution of packaging across warehouses and production facilities. Also, existing transportation capacity must be fully utilized, leveraging existing delivery routes to minimize carbon emissions and costs.

Forming win-win partnerships across the value chain helps de-risk circularity investments. Key challenges include significant upfront costs and the costs of returning and cleaning circular packaging, both of which limit solution scalability. Clearly, price points remain a crucial barrier to widespread adoption of circular packaging.

As more companies around the world join the circular economy to reduce waste and save costs, they will be reexamining and redesigning their supply chains to conform to circularity principles. For organizations in logistics, from those handling storage to those delivering in the last mile, this can mean sizeable shifts in operations and a focus on so-called reverse logistics offerings. Next to running warehouses and moving goods, logistics providers may see increased demand for value-adding services for products and materials they currently do not carry.

As mentioned above, circularity is boosted by the European Commission’s legislation giving consumers the ‘right to repair’. Consumers can save costs, as the law entitles them to repair during and after the legal guarantee period and are allowed to repair products themselves. For logistics and supply chain managers, this increases the need for accessible spare parts, repair manuals, and information on reparability, while considering business concerns about intellectual property rights and professional repair services. Additionally, warehouses may see a greater throughput of secondary raw materials like fabric scrap or reprocessed lubricants and may need to reconfigure facility floorspace and operations to unload, store, and load more of these products.

Taking the complex example of damaged electric vehicle (EV) lithium batteries, logistics service providers must establish specialized expertise in reverse logistics to ensure compliance with local, regional, and global regulations on transportation. This entails comprehensive considerations for battery management, storage, and handling to guarantee adherence to regulatory requirements.

Overall, circularity and in particular the demand for reverse logistics solutions will bring changes and value-adding opportunities to local and global supply chains. The logistics industry needs to anticipate and prepare for this.