Hanko Kiessner Shares the Benefits of Supply
Chain Sustainability in DC Velocity’s Logistics Matters Podcast
Climate change continues to bring a greater awareness of the effects of our supply chains on the environment. One major area of waste is in packaging. Not only should we look at packaging materials that can be easily recycled, but we should also consider the ripple effects from packaging that are the wrong sizes for the products that they contain. This is where a sustainable packaging strategy comes in. So, what is sustainable packaging?
To answer this question, Dave Maloney, editorial director at DC Velocity spoke with Hanko Kiessner, the chief executive officer of Packsize.
Hanko, you’ve been a proponent of sustainable packaging over the years. Could you explain to us what sustainable packaging means to you?
Sustainability was one of the founding principles when I came to the United States and started Packsize. I wanted to create a company that not only has a great solution for its customers, but also a sustainable one. Sustainable packaging to me means a lot of things. It starts with a sustainable material. We know that paper is sustainable because it is reusable, it is recyclable, and it is biodegradable. There are quite a few non-sustainable packaging materials like plastics. We all know about the problem we have with plastics in the ocean and that plastics are not decomposable. The supply chain also has to be sustainable. A package needs to be the right size, and shippable in the most sustainable way to where we have the least carbon footprint as we move packages from A to B. There also has to be a great experience for the customer who is opening the package, who then is responsible for recycling it. If all of this can be orchestrated in a way where you can do it forever, then to me it is sustainable. I had the privilege to travel through Alaska a few years ago, and it was the native people who shared with us what their interpretation of sustainability is. They said if you can do it forever, then it is truly sustainable. That is the standard I want to hold ourselves to and that I would like to see implemented in the packaging arena.
Why is this important for supply chain professionals to get behind, and what relevance does it have to managing our supply chains?
I like the word supply chain because it means all the products flow. Every step of the way needs to be documented and verified to be sustainable, and only then do you have a reliable and efficient method by which packaging arrives where it is needed and is used to be shipped, then opened, and then recycled. One has to take a supply chain perspective to really get this done in the right way.
Your company makes right-sized packaging. Can you explain to someone who may not be familiar with that term what right-sized packaging means?
I would probably start with what is not right-sized packaging. That is when you receive a package that is too large, has too much filling material, costs too much to ship, and uses way too much carbon footprint to produce and ship. That is what we experience every day. Too many companies are still not using right-sized packaging. So, what is right-sized packaging? You start with the products that were ordered, then you define what the minimum and best protecting package would be to ship these products, and then you come up with the right-sized package for that specific order. That means that you have infinitely many packaging configurations that are provided at the point of the packaging station. Right-sized packaging ships efficiently through the supply chain and delivers a great experience to customers. When you receive right-sized packaging, you notice it right away, because it is a smaller package with little or no filling material, and it is an easy and comforting recycling process because you know that you did not contribute to waste.
Your company makes machinery that produces a package that is the exact size needed for whatever products are being shipped, correct?
That’s exactly right. For every package, there should be the right packaging type and the right packaging size, and that is what we call right-sized packaging. We deliver equipment to our customers that enables them to create right-sized packaging by themselves and deliver that experience to their customers.
So, instead of having pre-prepared boxes, these boxes are made on demand to meet the product at the moment it’s ready to ship?
Yes. It’s basically a miniaturized, high-speed, fully automated packaging creation process with equipment and software that deliver the most amazing customer experience, but also the most amazing cost structure. You save on corrugated, on filling material, and labor. You accelerate your fulfillment process and you have less freight and transportation costs. Add a great customer experience at the end of all of this, and it’s a tremendous return.
You just shared some of the benefits of right-sized packaging, but when people think of sustainable packaging, they think that’s going to create more expense for my company. Can you share a little about the benefits and cost analysis of doing sustainable packaging?
I believe that sustainability and savings and profitability are all connected. If you take a wholistic view, sustainability actually reduces costs, it is usually faster, it is more reliable in most instances, and it delivers a great customer experience. Often there is this mindset that if it’s sustainable, then it has to be more expensive. That is not the case.
With freight rates rising almost everywhere because of increased demand for freight services, having a right-sized package really makes a difference in being able to save money on that freight, right?
Yes, not only do you save money on that freight, but you also take the pressure off the shipping lanes because you can now fit roughly 66% more parcels on the same plane, on the same truck, on the same delivery van, which then reduces the pressure on the shipping companies at the moment. That means they can be more efficient and don’t have to raise their prices. So, you really have a macro-economic benefit and a micro- economic benefit that actually helps the economy as a whole, and everyone benefits.
What can companies do to improve their packaging, and how do they get started with a sustainable program?
I would say this is more about change, not about can this be done or not done. We have proven for 19 years that it can be done. This is more about the mindset of, “Do I really want to change my packaging?” If so, anyone can then assess by how much shipping volume they are shipping and by what factor their packaging doesn’t fit. That might be the first realization. It’s very easy to create a business case and to verify that this is a good solution. We can help with that. At that point, you can have the solution without any upfront capital.
You have solutions that fit a wide range of companies with different shipping volumes, correct?
Yes, we have companies that do 100 packages per day and then we have companies that do a million or more packages per day, even within the same facility. The range is incredible. We have solution platforms for very small to very large numbers of packages per day. But also, the range of packaging configurations is great. We can package large furniture and cabinetry down to toothpaste and everything in between.
In looking at the future, how will sustainable packaging help to shape the future for us?
I don’t think we have a choice. We can only do things we can do forever. We have to look at the next generation. At some point, unsustainable practices will no longer be acceptable. This is a decision that we all have to face sooner than later.
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