[The following is an excerpt from "The Green to Gold Business Playbook: How to Implement Sustainability Practices for Bottom-Line Results in Every Business Function," by Daniel C. Esty and P.J. Simmons, published by Wiley. You can read an interview with Esty and Simmons here.]
How products get packaged and loaded for transport can significantly alter logistics-related costs and environmental impacts. Excessive packaging and shipping materials weigh down vehicles and force them to work harder, resulting in higher fuel costs and emissions. Likewise, ineffective load planning leads to empty vehicles that waste time and money. A truck shipping only 25 percent of its capacity burns two-and-a-half times more fuel per ton-mile as one that is 75 percent full.
Eco-smart companies have found that eliminating unnecessary packaging and increasing "load factor" -- the percentage of a vehicle or container's capacity being used -- cuts fuel costs, lowers shipping costs per unit, improves asset utilization and reduces emissions. For instance, a modest redesign of cereal maker Nature's Path's product boxes enabled it to stack six more boxes per pallet, which led to an 8 percent improvement in load factor on trucks. Dell's switch from wooden pallets to lighter, recycled plastic "slip sheets" saved over $30 million in packaging expenses in the first year and boosted load factor in shipping containers by 25 percent. Walmart boosted its U.S. fleet efficiency by 60 percent between 2005 and 2010 in large part by consolidating deliveries and loading trailers more effectively.
Best-practice companies focus on the following areas to cut costs and reduce eco-impacts from logistics-related activities:
Eliminate unnecessary items from shipments. Does your customer really need or want everything that accompanies your product -- manuals, duplicate cables or chargers, fancy boxes within boxes -- or will they just end up in the trash or recycling bin? Cisco, for instance, recently replaced lengthy paper documentation for its IP phone with concise 3 x 5 cards, and now the company ships three phones in the same space that previously held only two.
Root out excess packaging and shipping materials wherever possible. Puma, after trying for 21 months to reduce the size of its shoe boxes, decided in 2010 to eliminate boxes altogether and replace them with a "clever little bag" -- a packaging innovation that is expected to save the company 500,000 liters of diesel annually on top of cutting many other eco-impacts. Sometimes a lot of packaging is required to protect especially fragile or hazardous materials -- something that Amazon.com's "Frustration-Free Packaging" initiative learned the hard way when its scaled-down packages failed to protect computer hard drives. When product protection is an issue, explore air cellular products and inflatable packaging systems, which create air-filled cushions that can provide better protection in smaller, lighter packages. Reducing packaging is also better for consumers who must deal with recycling or discarding it.

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