The automotive industry is making driving cars far more sustainable.
But can it do the same for the way parts are moved?
While the industry moves to producing more efficient and sustainable electrified vehicles, there is still a lot to do to reduce waste in the automotive supply chain. Moving to reusable, pooled packaging makes it more sustainable and more efficient, with less risk and less waste.
Customers, investors and legislators are increasingly demanding that automotive companies respond to the urgent challenge of global climate change.
It’s estimated that 75% of the CO2 emissions generated by the automotive industry are from a car’s operation over its lifetime. But 18% comes from the supply chain1. And as electric vehicles (EVs) dramatically reduce the environmental impact of driving, the impact of waste in the supply chain will increase proportionally unless there is meaningful change.
Packaging can be overlooked as a major source of waste in car production. Yet the average vehicle contains over 20,000 parts, coming from thousands of different suppliers in different parts of the world, so the amount of packaging created can be vast.
One-way cardboard may be described as “recyclable”, but in practice this is a hugely inefficient process – as well as requiring a significant investment of time, cost and space in managing it.
Single-use packaging also creates waste in other forms. It’s relatively fragile, so there is more risk of product damage – especially with the higher value and more vulnerable components in EVs, such as the batteries. Because boxes can’t be stacked that high, trucks are often under-utilised – so you’re moving air, creating emissions and costs that hurt companies as much as the environment. And cardboard’s unsuitability for automated lines means that more manual handling is needed – increasing costs, and the risk of more damage, returns and wastage.
Moving to reusable pooled packaging is far less environmentally – as well as economically – costly. The real sustainability benefits for the whole automotive industry come from moving to a more circular, collaborative mindset that shares and reuses resources wherever it can.
The Capgemini 2020 report on sustainability in the automotive industry2 identified two key areas for driving down its environmental impact. The first was the shift to electric vehicles – which we see happening in virtually every original equipment manufacturer (OEM). The second was bringing circular economy practices across the value chain – which has had far less take-up so far.
CHEP is the leader in pooling solutions for supply chains. Its automotive customers become part of its global reusable packaging network, which makes them more circular and more sustainable.
They don’t have to waste time and resources on managing, storing and disposing of single-use packaging – or of running their own less-efficient pool. CHEP-maintained reusable packaging is also designed to be much more robust than cardboard, and far more suitable for moving onto and across automated production lines. And the supply of the packaging they need is always guaranteed, regardless of the demand fluctuations, which reduces wasted warehouse space and the risk of running out.
The scale of CHEP’s network also means less waste for everyone. Because of its network scope, collection and return trucks arrive more quickly and drive less distance. CHEP’s end-to-end supply chain visibility means they can find transport collaboration opportunities that no one else could. And there are even tracking solutions to take the risk and inefficiency out of transporting high-value or critical parts.
Atul Deodikar, Head of Corporate Logistics and GST at Endurance Technologies Ltd, explains the benefits of partnering with CHEP: “We were able to realise significant gains in sustainability by partnering with CHEP to reduce our carbon footprint. CHEP’s reusable automotive packaging not only saves trees, but it also keeps packaging materials out of our landfills. CHEP’s business model of share, reuse, recycle and reducing waste serves our company very well.”
CHEP is consistently rated as one of the world’s most sustainable companies. For over 30 years, CHEP has been a global leader in reusable automotive packaging, and has made its major OEM and Tier 1 customers more sustainable through sharing its circular packaging network and its sustainability expertise, experience and resources.
As expressed by Murray Gilder, Vice- President, CHEP Automotive & Industrial Solutions, “Companies in the automotive industry will be increasingly judged on their sustainability efforts. Moving parts in reusable packaging from the biggest global pool isn’t just the most sustainable way to transport them – it also takes cost, risk and waste out of their operations.”
Footnote 1: Luke Fletcher at Carbon Disclosure Project https://europe.autonews.com/automakers/bmw-mercedes-audi-others-race-make-entire-supply-chain-greener
Footnote 2: https://www.capgemini.com/wp-content/uploads/2020/03/The-Automotive-Industry-in-the-Era-of-Sustainability.pdf