Imagine a green Amazon. No, not the jungle. The retail giant. And imagine shipments to your porch that require neither gas-guzzling trucks nor cardboard boxes.
Amazon’s new fleet
Our story begins with Rivian, an electric vehicle manufacturer founded in 2009. Think of Rivian as a Tesla competitor, although focused more on custom vehicle solutions for business partners than on splashy consumer rides.
Amazon has contracted with Rivian for 100,000 electric trucks as part of the company’s participation in the Climate Pledge, an agreement among 154 companies (and counting) to reach the Paris Agreement’s terms 10 years early. Signatories of the Climate Pledge also agree to make their businesses net zero carbon by 2040, 10 years ahead of the Paris deadline of 2050.
According to Amazon’s director of global fleet and products Ross Rachey, “We’re trying to build the most sustainable transportation fleet in the world. It also needs to be the most functional, the highest performing, the safest.”
To that end, Rivian and Amazon have worked together to create three truck designs, each larger than the next. The vehicles will be integrated with Amazon’s famous logistics systems and drivers will be able to ask Alexa for help and support.
With 100,000 vehicles hitting the roads starting next year, this is an enormous fleet. To put things into perspective, UPS operates 125,000 land-based vehicles in its delivery fleet.
In terms of ecological footprint, Amazon expects to be a lot greener than UPS. UPS operates 10,300 alternative fuel vehicles, while Amazon is planning on fielding ten times that amount by 2030.
Amazon has a blog post describing its electric vehicle investment. What the company doesn’t discuss is how much of that fleet will be displacing the delivery business it currently sends to UPS, the US Postal Service, Amazon’s gaggle of gig workers in their own vehicles, and local businesses that provide delivery services.
Cardboard may seem like a relatively low-tech material, but when you factor in its impact on our economy, ecology, and the logistics of supply chain and retail distribution, you can begin to see how complex cardboard really is.
We use cardboard primarily as an encapsulating device. It surrounds, secures, and protects what’s packed inside. It often aggregates more than one item, the way a zip file combines an entire folder of files. Cardboard, in the Amazon context, is used as a secure shell to move products from factories to warehouses and from warehouses to our houses.
According to market researcher Fastmarkets, online shopping from vendors like Amazon is six to seven times more “cardboard intensive” than shopping in a local store. Keep this “cardboard intensive” statistic in mind.
It makes sense that retail purchasing is less cardboard intensive than online shopping. Let’s say you go to your local Costco and pick up some inexpensive silverware, a hammer, and a tasty rotisserie chicken. Costco doesn’t provide bags (and here in Oregon, it’s recently become illegal for retailers to provide free single-use plastic bags). At Costco, sometimes you can find some used cartons to carry your stuff out to the car. You can bring your own bags, or you just carry everything out in the shopping cart.
But if you buy online, everything has to be shipped in a carton. Amazon realized this could be a problem as far back as 2008 and instituted its Frustration-Free Packaging program. The company works with vendors to provide packaging that can do double-duty as shipping containers, reducing the box-inside-a-box syndrome we’re all so frustratingly familiar with.
According to a 2017 Amazon blog post, more than 750,000 products are now available in Frustration-Free Packaging. The company reports that the program eliminated 215,000 tons of packaging material and avoided shipping 360 million boxes.
But that’s a drop in the bucket when it comes to online commerce cardboard usage. Fastmarkets provides some breathtaking data:
- Over five years, from 2014 to 2019, American online shopping has used 20- to 23-billion square feet of corrugated cardboard.
- In that same five year period, online shopping has increased US container board demand by 1.5 million tons. That’s on top of the traditional demand from the overall manufacturing sector.
Also, Frustration-Free Packaging isn’t always the ecological boon Amazon would like you to think it is. The program has given rise to a new type of business, the repackaging center. Here’s how it works.
When a vendor has a product it wants to sell on Amazon but doesn’t want or can’t afford to tool up two manufacturing lines (one for retail and one for Amazon), it builds the retail product, complete with all the extra packaging. It ships the retail packaged product to stores, but instead of shipping that same product directly to Amazon, it ships it to a repackaging center. There, workers remove the display-oriented retail packaging and re-box the product for Amazon sales. Of course, all that removed packaging is now waste as well.
You win some. You lose some.
From the corrugated cardboard industry’s perspective, all of this online demand is a big boost to what was a moribund business. But from an ecological perspective, it’s a disaster.
Here’s where it gets messy (literally). Up until about two years ago, the US sent much of its cardboard and plastic trash to China for recycling. For a long time, this proved profitable for everyone involved. But no more. China used to accept nearly half of all the world’s recyclables. In 2017, to stem an ever-increasing nationwide environmental disaster, China instituted its National Sword ban on trash imports, which affects both plastic and paper. Without the ability to send cardboard overseas efficiently, it’s been piling up in local communities ever since.
There are, of course, local dumps and recycling plants. But cities and towns are having a hard time picking up the slack.
Since cardboard and plastics intended for recycling can no longer be sold by community recycling centers to aggregators who sold the refuse to China, the recycling centers have lost the majority of their income. As a result, some communities have closed their recycling centers entirely.
The cardboard sent to recycling plants is a lot less recyclable than it used to be. That’s the fault of online shopping. Cardboard picked up curbside (that is, cardboard recycled by consumers) makes up almost half of the recycled materials discarded today. Fifteen years ago, cardboard accounted for less than a third of that.
But it gets worse. Consumer-discarded cardboard is filthier than retail-discarded cardboard. When a retailer discards a cardboard box, it’s generally clean enough to be recycled. But when a consumer discards cardboard, it’s often mixed with or contaminated by other household trash, rendering it suitable only for landfill or incinerator.
According to Richard Coupland, vice president of municipal sales at Republic Services (a recycling service provider) in a story reported by The Verge, “On average, about 25% to 30% of the materials picked up by a recycling truck are too contaminated to go anywhere but a landfill or incinerator.”
Basically, cardboard is an ever-increasing problem due to two conflicting vectors. First, we’re buying more and more online. Second, it’s getting harder and harder to dispose of it.
That brings us to the speculative part of this analysis.
How Amazon’s electric truck fleet might eliminate cardboard carton use
First, a disclaimer: What follows is speculation, based on my understanding of supply chain logistics. As far as I know, none of the following has been promised or even hinted at by Amazon.
If you ever watched Law & Order, you’re familiar with the legal term “chain of custody.” As it pertains to criminal prosecution, the chain of custody establishes the credibility of the evidence. The idea is that evidence tells a story and if the evidence can’t be considered credible, neither can its story.
The chain of custody is designed to show that, at each point where evidence is touched or stored, there’s documentation proving the credibility of that evidence. A knife from a crime scene can be documented as going from police officer to evidence bag to lockup to lab. The lab results, therefore, would be considered valid because nothing else has touched the knife.
Chain of custody is also used in the art and historical world to establish provenance — in other words, that the object that is described is the object that’s been curated.
Amazon’s product shipping process also has something like a chain of custody. When you order a product or products, those items are picked from storage, packed in a box, placed on a truck, a plane, transferred to a service like UPS or the USPS, and delivered to your home. The carton your order is packed in establishes that chain of custody, so the goods that Amazon packs up are the ones that third party carriers have transported and then delivered to you.
As long as Amazon uses third party delivery services, whether that’s UPS, the postal service, or even Amazon Flex drivers, the cardboard carton is necessary to ensure delivery. Not only does it establish a chain of custody, but it also contains labeling and coding that ensures delivery to the proper destination as it changes hands across the supply chain.
But what if Amazon could extend its warehouse all the way to your curb?
Here’s the current process, simplified: When you place an order from Amazon, the item you want is stored on a shelf somewhere in an Amazon warehouse. That item is removed from the shelf and transported to someone who packs it in a box.
Whether there’s a robot that does the picking and transport or a combination of workers and robots, the key fact relevant to this discussion is that, at that time, the item removed from the shelf is not packed in a cardboard box for transit to the packer. Instead, that item is generally transported in an open, reusable bin.
That’s because Amazon knows exactly where the product is coming from on its shelf and exactly where it’s going to for packing. It’s possible to count on that transfer being reliable because the item never leaves Amazon’s control in the course of its short journey.
But what if that bin system could be extended across Amazon’s own semi-trucks, across Amazon Air, and into its new fleet of 100,000 custom-designed electric delivery vehicles? Could Amazon maintain reliable carton-free transfers from the warehouse shelf to your porch?
If an item stayed in Amazon’s direct control from shelf to semi, from semi to plane, and from plane to local delivery vehicle, Amazon could maintain a chain of custody all the way to the curb. Making it to the porch is another issue, which I’ll discuss in a bit.
Let’s say you order a replacement remote control. It could go into a coded bin at the shelf, transfer to another coded bin at the truck, yet another coded bin on the plane, a coded bin at the local delivery hub, and finally a coded bin on the Amazon delivery truck. There’s no need to put it in a carton to establish where it’s going. A combination of the product’s UPC code, the coding on the bin, and Amazon’s global database could provide that information in real-time – without needing a carton to be an encapsulating device for delivery instructions.
Complete end-to-end chain of custody is not possible when packages are delivered in the last mile by UPS or USPS. But it does start to become possible when Amazon owns the entire distribution chain, culminating in Amazon’s fleet of custom-designed trucks.
Exactly how this would work is subject to Amazon’s R&D. It could be that it’s facilitated merely by coded bins. It could be enabled by RFID tags or NFC tags throughout the delivery chain. It’s even possible that Amazon might build a robotic picking operation in the back of each truck.
Each UPS driver makes an average of 120 stops per day, so we can assume each Amazon truck would as well. That means each truck would be loaded with roughly 120 to 500 or so items for each trip through a neighborhood. That’s certainly doable in a small to the medium-sized van.
There is one gap in this end-to-end supply chain that might still require cartons: the trip from the curb to the porch. But even that could be eliminated. Yes, it would take a new form of infrastructure, in this case, a secure item delivery receptacle installed for each address.
I think we may be headed this way anyway. According to C+R Research, 36% of those surveyed have experienced a package being stolen and 56% knew someone who had experienced a package being stolen. Of survey respondents, 44% said they have some sort of package delivered to them on a weekly basis, while 51% of Prime members report the same.
According to the Los Angeles Police Department, the increase in porch-based thefts has shot up by 600% in the last decade. C+R reports that most consumers (83%) turn to Amazon when they notice a package missing. Given these numbers, it’s likely that a secure receptacle will become a common landmark on porches throughout the country.
It might make sense for Amazon to design and pay for these receptacles, make them another benefit of Prime membership, or incentivize them in some other way. If Amazon designs the mechanism, they can add additional tracking that completes the end-to-end chain of custody all the way to the porch. This is the final piece of the puzzle that allows someone to order, say, a screwdriver from Amazon and have that screwdriver, sans carton, appear in their porch Prime receptacle.
What kind of impact would this have?
From the point of view of cardboard waste reduction, the impact could be huge. Recall that online shopping from vendors like Amazon is six to seven times more “cardboard intensive” than shopping in a local store. By implementing an end-to-end chain of custody for items, Amazon may be able to reduce its cardboard intensity to a fraction of what it is now.
Billions of boxes would no longer need to be trashed, recycled, or managed. Thousands to millions of trees wouldn’t have to be destroyed.
Sure, some items (especially larger ones like flat-pack furniture and TVs) would still ship in their original cardboard cartons. But the billions of smaller cartons could be eliminated from the distribution chain.
What other impact will this have? Well, there’s the obvious hit to the revenue stream of UPS and USPS, the possible reduction of gig work for Amazon Flex workers, and a whole raft of secondary effects too difficult to predict.
But if Amazon can take replace 100,000 gas-guzzling trucks with sustainable electric vehicles and can remove the cardboard from the shipping equation, it will go a long way to reducing the company’s negative ecological footprint.
What do you think about carton-free shipping? Has all the extra cardboard from online purchases become an issue in your life? How are you dealing with it? Please share your thoughts in the comments below.
You can follow my day-to-day project updates on social media. Be sure to follow me on Twitter at @DavidGewirtz, on Facebook at Facebook.com/DavidGewirtz, on Instagram at Instagram.com/DavidGewirtz, and on YouTube at YouTube.com/DavidGewirtzTV.
View original article here Source