Global e-Commerce Packaging Industry Benefiting at the Cost of Environment

Along with the e-commerce industry’s contribution to the economy, its quick growth has come at a price – millions of tons of waste has been produced over the last few years. China generated four million tons of waste in 2015, using 7.5 billion plastic bags, 17 billion meters of wrapping tape and 10 million cardboard boxes. Much of this waste is being deposited in landfills without any processing. These unprocessed materials take up to 1000 years to decompose, and eventually end up leaking pollutants into the soil and water.

A solution to these environmental concerns is to use green packaging/sustainable packaging. Materials that are biodegradable, produced using environmentally-sensitive methods, safe and healthy for individuals throughout its life cycle and less energy-consuming all fall under green packaging. Using recyclable material is not a separate practice, but again a subset of green packaging.

Except for a few specialized products and packaging campaigns, the e-commerce packaging industry is mostly engaged with secondary packaging (holds one or multiple primary packages, like boxes, cartons etc.) and tertiary packaging (generally used to protect and ship goods, like pallets, stretch wraps etc.). The major e-commerce packaging solutions include corrugated boxes, courier bags, security envelops, tapes and protective packaging. Corrugated boxes are recyclable in nature and, to a certain extent, make it up to the recycling plant. Adhesive tapes, which are extensively used, are non-degradable. Usage of Kraft flatback tape is a better solution, which is made of Kraft paper and has renewable rubber adhesive on the back and is degradable in nature.

Corrugated boxes account for approximately 30% of the e-commerce packaging industry and a greater percent of its demand is generated by e-commerce industry. Instead of using larger boxes with more fillers (shock absorbing materials), usage of tight fit boxes which weigh less (thus reducing freight cost) should be considered. Companies like WestRock have come up with an integrated Kraft paper liner that eliminates usage of fillers. One can also use multi-depth boxes instead of using multiple sizes of boxes. These boxes can be adjusted and packed as per the desired height. Additionally, one can avoid using Styrofoam peanuts, which are non-degradable, and look at starch bubbles, which can be dissolved in water. This, of course, can be a drawback in wet conditions. However, this problem can be circumvented by ensuring an effective transportation solution that prevents the packages from getting wet.

Many companies are also considering designing better packaging boxes. Knowing that e-commerce return rates are 20-30%, a better designed box would help in reducing waste. The same box that has been parceled, if well-designed, can be repurposed to pack and return, thereby adding no new box in the system. Amazon has been very innovative in taking these steps. They recently launched frustration-free packaging that is easy to open and 100% recyclable. They also design packages that use no adhesive tape and are damage-free. This also helps in reducing the labor cost of packing the items.

Customers also have a sense of responsibility toward a better environment and are open in embracing the concept of green packaging. However, green packaging shouldn’t compromise on the quality of packaging. The key component for e-commerce packaging is durability. A damaged product delivered to a customer reduces the probability of them going back to the same supplier again by more than 50%. Hence, the concept of “protective packaging” will be a crucial addition to this situation.

The cost implications of green packaging, however, are off-putting. Green packaging materials cost approximately 40 to 45% higher than traditional materials. Procuring green packaging materials is relatively difficult, as traditional materials have dominated the market for years. However, many companies have committed to use recyclable materials for their packaging. One such example is Unilever who has committed to use 100% recyclable packaging by 2025. Amazon has also taken a firm stand toward a sustainable packaging initiative.

So, the idea here is not to bounce directly into green packaging but to consider, “How do we reduce the cost of greener packaging?”

The entire life cycle of the package needs to be considered before making this decision. Lifecycle analysis is performed to understand the carbon footprint of the used materials and all respective trade-offs. Companies should also take steps to downsize boxes and start using mailers wherever there is opportunity to do so. Downsizing boxes can also help in reducing freight and transportation costs, thereby compensating for the higher costs of green packaging materials.

E-commerce companies should start looking at green packaging as an investment rather than a cost, as this would help them in the long run by creating a sense of corporate responsibility and customer loyalty.