Sustainability in Business

Logistics in reverse: CHEP Australia

Reverse logistics company CHEP Australia outlines its achievements to help build a circular economy across the supply chain.  

Fast-moving consumer goods (FMCG) companies play an essential role in the waste diversion process.

KPMG’s FMCG and retail chain study identified food labelling and food waste as key issues for the industry. It noted that with population growth, less arable land and changing growing conditions, the focus on minimising food waste is increasing. 

As part of reducing supply chain waste, the logistics sector can make a contribution with Internet of Things, blockchain and other innovative packaging technologies extending product shelf life. 

Rather than focusing on the linear model of take, make, dispose, global supply chain company CHEP Australia is enabling retailers, manufacturers and transporters to move goods around sustainably. 

With more than 1000 employees in Australia and New Zealand and in excess of 13,000 under its parent company Brambles, CHEP’s model sees it partner with logistics companies to manage, maintain, transport and supply platforms for its customers. From pallets to containers, bins and store displays, the company supports the build, handling and transport of more efficient and sustainable product loads.

According to Brambles 2018 Sustainability Review, the company perpetuates the share and reuse of more than 610 million reuable pallets, crates and containers. The model requires plastic pallets, crates and containers to be washed for reuse. Its wood and plastic aims to achieve zero product waste. 

CHEP Australia’s achievements locally saw it win an award for Outstanding Achievement in Sustainable Packaging Operations at the 2018 Australian Packaging Covenant Organisation (APCO) Awards.

The company primarily serves customers in the FMCG, fresh produce, beverage, retail and general manufacturing industries. With a circular economy focus, the company’s strategy comprises providing a product as a service, recovering and reusing, product life extension, a sharing platform and circular supply chains. 

Some of the ways it provides a product as a service is offering the benefits of pallets, crates and containers without the purchasing and disposal burdens of ownership. It also designs its products for durability and avoids single-use alternatives. Through extensive sharing networks, the company is able to amplify its product value. 

In line with the APCO target of 100 per cent recyclable, reusable or compostable material, Brambles is also introducing fully renewable, recyclable or biodegradable materials to reduce costs and increase predictability and control. 

Lachlan Feggans, Director, Sustainability, Asia Pacific, Brambles Limited, says the company is helping FMCG’s and other retailers hit their sustainability targets. APCO members report on their sustainable performance using the organisation’s Sustainable Packaging Guidelines. 

“When CHEP approaches a customer, we have to do it in a systematic way, because it’s difficult for us to target one part of the supply chain as our products are shared,” he says.

“The interesting thing about the Australian market is that retailers seem to have a lot of clout. If they can benefit from more sustainable packaging options than they tend to help the rest of the supply chain adopt that process over time.” 

He notes that there are different processes around the globe.

“In the US, it’s growers that dictate packaging and the suppliers receive it. The unusual situation in the Australian market is that suppliers have been using a lot of single-use packaging. That relationship is strong and therefore they send that to retailers.” 

He says that CHEP’s use of reusable plastic containers can reduce food waste by up to four per cent compared to single-use products, including by cooling down a product more efficiently in the cold chain. 

According to the Brambles 2018 Sustainability Review, replacing single-use products with alternative processes has saved its customers 1.4 million tonnes of waste, 4719 tonnes of food waste and 2.6 million tonnes of carbon dioxide emissions. Customers can also make their supply chain carbon neutral by purchasing carbon offset credits. Almost 100 per cent of its wood material is also from certified sourced and it is aspiring for 100 per cent Chain of Custody certification by 2020. 

The report indicates that barriers to circular systems can be a lack of product standardisation and traceability, but fortunately companies that adopt the model end up benefiting. 

Lachlan says that CHEP conducts an environmental impact analysis on carbon emissions and solid waste savings from its circular activities, allowing them to present the evidence to shareholders and management. 

As a reverse logistics company, CHEP is able to monitor where its customers are in time and improve the efficiency of supply chains as a result.

“CHEP is in a unique logistics category. We don’t own any trucks but what we see from other logistics partners is the opportunity to move towards more efficient packaging on those trucks,” he says.

Lachlan works with logistics supply chain providers to leverage data and ascertain whether trucks are full or empty.

He says the critical element for businesses going forward is to ensure they conduct lifecycle assessments with third party organisations to ensure their processes are scrutinised.

The challenges going forward, he says, will be to get the message out there to stakeholders of a circular economy. 

“The key point for us is that when you recycle any material, at least 10 per cent is lost. Recycling slows down the linear economy. Our way through a circular economy is to look at a new way of producing and consuming goods.”

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