“Major U.S. retailers reported jumps in e-commerce volume in the second and third quarters — some more than 100%. And roughly one-third of U.S. small- to medium-sized businesses reported, as of September that their shipping volume had increased, according to a poll conducted by Morning Consult on behalf of Pitney Bowes.”
The pandemic has created havoc in economies across the world. It may seem from the quote above and the market valuations of tech stocks such as Amazon, Alibaba that the e-commerce business is booming, but it has been a mixed bag for the parcel shipping industry.
Reports indicate that much of the business in the US has shifted to the two largest delivery companies, FedEx and UPS and they have increased shipping rates, which are being borne by the biggest e-retailers. FedEx and UPS concurrently have been delivering more residential packages than commercial packages during the pandemic. However, due to the large business volume, most delivery companies have had to fix caps on weekly volumes during peak seasons, suspend delivery guarantees or inform about delivery delays and/or add COVID-19 peak surcharges.
It should be of concern to e-commerce retailers that they adopt sustainable practices in packaging and shipping, to protect the environment and so that they can showcase their values to the customers. 47% of CGS survey respondents in 2019 said that they would pay 25% more for a sustainable product and according to Nielsen, 73% of survey respondents said they would change their purchasing habits to reduce environmental impact. Here are some of the practices using the three R's paradigm of environment - Reduce, Reuse and Recycle:
1. Companies can reduce any misinformation in the order process; when customers place an order, multiple reconfirmation of order details such as size or capacity, model/make and shipping details. Even invoice should be clear so that the customer can see the information clearly and intimate customer service if there are any errors before shipping is carried out. Reduction of misinformation can help avoid shipping and return costs and maintain customer loyalty.
2. Companies can consider minimizing the package size according to the products they ship. Not only does it save costs, it reduces the environmental impact. Imagine getting a small set of wireless in-ear headphones in a shoe-box type of box! E-commerce retailers can consider software like Cape Pack from Esko or Tops Software to design the safest and best type of packaging for their product. Reducing the amount of plastic and instead using biodegradable plastic reduces the impact on the environment.
3. It may seem insignificant, but reducing inking and creating standardized sizes helps in reducing wastes. Bio-based inks are now available as an option for branding packages.
1. Some companies are promoting packaging which can be reused. RePack and Limeloop offer a subscription service where you use their packaging and return them to the companies for further orders.
2. Companies can also promote to clients that they can reuse the packaging if it is durable and eco-friendly, for example, if products are shipped in customized boxes or bags made from organic materials like jute, customers can reuse the packaging for other purposes.
1. Using more recyclable materials like cardboard, paper, biodegradable or compostable plastic (plant-based) in packaging contributes to a circular economy. Plant-based packaging solutions are relatively new and sourced from corn, seaweed, wood pulp and others. Not all plant-based packaging solutions are compostable so e-commerce businesses need to research whether a particular material is compostable or not.
2. Few companies, particularly consumer electronics manufacturers, have developed programs to take back obsolete products which requires coordinated shipping as an integral part of such programs.
E-commerce retailers can also partner with shipping companies that are taking efforts in reducing their carbon footprint, such as optimization/aggregation of shipments using big data analysis and deliveries through electric modes of transportation. With a plethora of options available to e-commerce businesses, going sustainable is no longer an expensive expedition. Consumers are becoming more proactive and both developed and developing countries are shifting their attention to becoming circular economies.