Made From Trees-Forest Products Move Markets

Every day, many of the items used in daily life were made possible by forest products industries. The type of forest products in demand the most are various types of lumber. Used to make everything from furniture to home construction to wood pallets and containers; lumber is vital to many industries.

The transportation and logistics industries use wood pallets to move nearly everything. 1.8 billion pallets are in use every day, shipping 90% of the world’s goods. 90% of those pallets are made of wood, making them some of the most important forest product-derived items in the world.

Forest Products and Processes Add Sustainability

Forest products play a major role in the supply chain. Within the subject of climate change and the impact to the environment, the supply chain is under pressure to increase sustainability and reduce carbon emissions. The forest products industry is at the forefront of harvesting and creating renewable resources and products that are reusable and recyclable.

As part of that process, modern logging practices are incorporating sustainable principles to help forests remain healthy and productive. Well-managed forests generate some of the most valuable resources for mitigating climate change and provide useful products that positively impact daily life.

Wood Packaging Logistics and the Supply Chain

Wood packaging used in the supply chain includes pallets, boxes, crates used to transport goods. Well-designed wood packaging keeps goods from being damaged during transit. When heat treated and stamp-certified according to international standards like ISPM-15, wood packaging ensures that goods move seamlessly between countries and facilitates international trade.

Wood Pallets in the Supply Chain

Wood pallets are a core component of the supply chain. Their functionality makes them easy to load and unload via forklifts and pallet jacks. Their durability helps protect items shipped and their design makes them easy to store for reuse.

Wood pallets set the standard for supply chain strength, resilience, and sustainability. 95% of wood pallets are recycled and reused multiple times throughout their lifecycle. Pallets, as a crucial link in the supply chain, are leading the way toward a circular supply chain that eliminates waste.

They are also increasingly popular with consumers for DIY projects as the public recognizes their versatility. When they do reach the end of their useful lifespan, wood pallets are often down-cycled into other useful products like mulch, wood pellet fuel or craft wood.

A current challenge for wood pallets in the supply chain is availability. A consistent supply of quality pallets has always been in demand. When the pandemic hit, so did a broad increase in products shipped via e-commerce. As shipping has rebounded from those initial lock-downs, demand for pallets has exceeded supply.

At the same time, delays in other parts of the supply chain were causing the price of lumber to increase. Industries that use pallets to ship products began to appreciate the wood pallet as a principal component of a stable supply chain.

Forest Products-Above and Beyond

A relatively new arrival in the world of sustainable forest products is mass timber. Mass timber is an engineered product made up of multiple pieces and layers of wood sandwiched together. The result is an incredibly strong and resilient building material that is used in the construction of large buildings that were once built with steel or concrete alone. Mass timber technology is being used to build in Canada and Europe, and is now beginning to launch significantly in U.S. building construction.

Wood Fuel Powering Industry

Burning wood for fuel is nothing new. But the processes used for this age-old forest product are changing. Rather than using traditional firewood for heat in homes, people are turning to pellet stoves.

The pellets used in these stoves are commonly made from compressing wood byproducts that would otherwise go to waste. Wood pellets contain very little water, making them light and easy to handle and transport. They burn hot and clean and are considered to be carbon neutral.

The same pellets can be used to produce steam and electricity.

Biomass consisting of wood and plant products is finding a place as a clean energy option. It can be burned directly or processed into gas or liquid fuels. While not as clean as solar or wind energy, it is vastly cleaner than fossil fuel use and is renewable.

Residential buildings and industries are turning to biomass and other renewable sources for their energy needs.

Forest products surround us in our everyday lives. Renewable forestry practices have created an industry that leads the way in a world rightly focused on sustainability and net zero carbon emissions.

Achieving Supply Chain Sustainability with Wood Pallets

Supply chain sustainability becomes more important with the passing of new climate change legislation. Companies from every sector are identifying challenges and presenting solutions to make their supply chains more environmentally friendly.

For every industry, taking action to mitigate climate change is fast becoming a primary concern. As one of the fundamental cogs in the economic wheel of trade and commerce, supply chain management can lead the way with long-term sustainable solutions.

A More Sustainable Supply Chain

For consumer businesses, the supply chain accounts for 80-90% of environmental impacts. This includes greenhouse gas emissions and air, land, water, and other ecological impacts.

Addressing those impacts to comply with climate action regulations and consumer demand is one of the great challenges facing business today. It won’t be easy, but creating a more sustainable supply chain is possible.

Nearly every major industry already has access to a crucial part of a sustainable supply chain: the wood pallet.

One of the supply chain’s most essential components, the wood pallet is also its most sustainable. Of the 1.8 billion pallets in use in the United States, 90% are made of wood.

The life cycle of wood pallets represents a gold standard in terms of sustainability. As the holder of an Environmental Product Declaration UL Certification, wood pallets exemplify the philosophy of reduce, reuse, recycle.

Strong, long-lasting, reusable, and recyclable, wood pallets may even produce a net positive carbon footprint. They store carbon dioxide throughout their life cycle and save it from release into the atmosphere.

Today, the wood pallet represents a sustainable choice. The challenge is to realize the same level of sustainability across entire supply chains and, in effect, operate at a net zero waste capacity. Recyclable pallets manufactured from renewable resources is a key choice.

Consumers are demanding that companies make decisions based on positive environmental impact. Everyone from suppliers to end users is making sustainability a priority.

A company needs a comprehensive plan for sustainability at every level. Now is the time to examine and improve processes, but where to start? That’s where good partners can be the necessary guide with insight and metrics.

The Challenges Ahead

Sustainability challenges begin with system complexity. Companies have historically ignored supply chain areas outside their direct control. This leads to gaps in information and bottlenecks that go unnoticed until they bubble up and require action.

Sustainability is measured by the environmental and human impact of every single step of the lifecycle of a product. A company that creates eco-friendly headquarters also needs to attend to working conditions, pollution, and transportation practices abroad.

Problems vary depending on the industry. One company may identify air and water pollution from suppliers’ operations. Another may find inadequate safety measures where raw materials are procured.

Companies need comprehensive information about each step in the lifecycle of their products. That includes energy providers as well as suppliers and sub-contractors.

Once detailed information is collected, planning can begin for remediation of negative impacts. Over 80% of businesses do not have the information they need improve the sustainability of their supply chains.

Consumer businesses balance affordability with reliability and sustainability at every level of operation. Instituting sustainable practices may seem costly, but they strengthen the supply chain and save money in the long-term.

Decreasing pollution, shoring up facilities against extreme weather, and making positive contributions to healthy communities all make the supply chain more durable and more efficient. Time and materials are saved by eliminating wasteful and harmful practices.

Managing Supplier Sustainability

The most challenging aspect of creating a more sustainable supply chain is working with suppliers and their subcontractors. 75% of companies do not work with suppliers to reduce carbon emissions.

Businesses are like all customers—they have influence. A company can search for suppliers that already have sustainability goals and practices in place. They can also mandate that their suppliers bring facilities into compliance with a set of practices they determine will increase sustainability.

An even better solution is to work directly with suppliers. Using clear and verified guidelines for sustainable practices, companies can help suppliers improve operations.

The company goes from demanding customer to trusted partner. The environmental and human impact of the improved relationship strengthens to a more sustainable supply chain.

How a company works with suppliers depends on what objectives are identified. Making sure that everyone is using wood pallets is an easy first step in helping suppliers become more sustainable.

Best Practices in Sustainability

The complexity of supply chain sustainability can make it seem unmanageable. Organizations like CDP, World Wildlife Fund, The Sustainability Consortium, and others offer guidance. They help companies find issues and set goals for decreasing environmental and societal impact.

Looking to wood pallets as a framework, we can see some best practices at work.

Supply chains should use, wherever possible, renewable resources. Invest in solar, wind, and other clean energy use to build infrastructure and decrease pollution. Buy recycled wood pallets from suppliers wherever possible.

Make landfill avoidance a priority. Reduce waste, reuse materials, and recycle what is no longer useful. Wood pallets can be reused up to 15 times, and can be recycled into furniture, structures, biofuel, animal bedding, or mulch.

Studies show that 95% of wood pallets are recycled into usable materials. Even the small amount that ends up in the landfill can be used as the biodegradable top cover.

Incremental Improvements in Sustainability

The global supply chain is still far from its sustainability goals. Even the wood pallet industry can do more.

Ensuring that your wood pallets are used as many times as possible should be goal number one. Widely available recycling initiatives reduce the number of pallets that go to the landfill. Encouraging or helping suppliers switch to wood pallets improves lower-tier sustainability.

Every step gets us a little closer to a circular supply chain. Waste reduction, energy conservation, and greater emphasis on processes that benefit both society and the environment all reduce long-term costs.

Wood pallets are an important part of a sustainable supply chain. Unlike plastic pallets, they are recyclable, sustainably produced, and biodegradable.

There are places in your supply chain where sustainability requires concerted efforts with far-flung partners. Implementing the use of wood pallets across your company and its suppliers is an uncomplicated, powerful way to make a difference.

Green Supply Chain Practices

There are multiple ways to implement sustainability practices in a supply chain. Choosing which areas to tackle first can seem complicated. But some common practices cross industries and apply to most companies.

Materials

Choose recycled or sustainably produced materials (like wood pallets). This is one of the most basic applications of the reduce-reuse-recycle framework. Every business can choose green materials at some level.

If shipping products, then choose wood pallets. Wood pallets are less expensive and 95% are reused and recycled. Shipping is already very energy-intensive. You can help reduce its impact with your choice of materials.

Purchasing

Companies make procurement choices every day. Take the time to choose suppliers in your industry that are already using green materials and processes. Try to find suppliers that incorporate sustainable practices already.

Purchasing from an environmentally responsible established supplier strengthens their position in the market and provides an incentive for other suppliers to follow the lead.

Remember hidden costs. You may pay more with a green supplier, but do you save in responsible waste disposal and/or recycling of more materials? Audit the product lifecycle and determine where costs can be re-distributed or eliminated.

Transportation

Transportation is a leading contributor to greenhouse gas emissions. As energy-saving options come on the market, take a closer look at your transportation suppliers. Choose those who are investing in clean-energy options. Just like all other purchasing, balance the cost of choosing greener transportation with the overall benefit to the communities you serve, your reputation, and the stability of your supply chain.

Packaging

Packaging can be one of the largest contributors to product wastefulness. Look at the entire lifespan of your packaging. How much of it ends up in the landfill, and how much of it can be reused or recycled?

Consumers are looking for less packaging. They’re also looking for innovative disposal methods. Can you use compostable packaging? Give your customers an easy choice with clear and visible instructions for environmentally friendly disposal.

First Steps-Greening the Supply Chain

No matter how big the company, the first steps in greening the supply chain is to understand that it is complex endeavor that will require time and resources to be truly effective. A green supply chain is intentional. The strategies come from the top down and involve every part of the chain. Build a plan and tackle each issue comprehensively.

Examine each step, from the acquisition of raw materials to the last mile of delivery. The key is to make incremental changes in daily operations that are part of a larger strategic plan. Identify the weakest points and work to strengthen them.

Talk to suppliers about sustainability practices. Some will have implemented strategies that lend themselves easily to the effort. A company’s vision and plan for sustainability is part of a larger strategic plan and supplier partners that can help by virtue of their own sustainability practices are essential.

A great benefit to investing in the green supply chain is that the effects can be larger than the intended scope of the initial investment. Helping a supplier/partner to improve its sustainability practices can create a stronger, more resilient supply chain overall.

That goodwill becomes a part of your company’s legacy and reflects positively on the reputation in the business community as a good partner.

The goodwill is a small, but essential, step in creating sustainable industries that become the standard.

The pandemic has exposed the fragility of supply chain problems as a worldwide issue. We are also realizing that greening supply chains makes them both more environmentally responsible and more resilient. Taking the first steps in greening the supply chain may seem daunting, but the small steps that a company takes can make a difference.

Every company that invests in sustainable practices, like using recycled wood pallets, is contributing to a greener global business environment. Those contributions will add up collectively to help lower costs and reduce waste.

Examining the company’s environmental footprint might seem troublesome, but seeing it as an opportunity to make positive, eco-friendly changes is good for business.

 

The Value Driven, Green Supply Chain

The whole world is more aware of the supply chain than they have ever been before. Pandemic-induced disruptions brought attention to the complexity of supply chains. Most people didn’t realize the impact of conditions in faraway places on the products they buy.

Climate change brought more attention to the sustainability and environmental impact of supply chains. The combination brought worldwide scrutiny to this historically overlooked essential underpinning of the global economy.

As we face a change in the methodology of supply chain operations and the increasing demand for more sustainable practices, businesses are looking at greening the supply chain. But what exactly does that mean?

Greening the Supply Chain

The phrase, “greening the supply chain”, often refers to practices that reduce the environmental impact of each step in a supply chain. But it can also encompass health and safety, societal impacts, and quality-of-life issues.

The degree to which sustainability programs and practices could be applied in a supply chain were originally thought to be based on the complexity of operations and where astute management could enable a more hands-on approach. However, the reality is that supply chains are a collaborative effort and no one company can lay claim to a singular approach that functions effectively.

The Green Supply Chain

A greener supply chain isn’t only about environmental impact. It’s also about saving resources and money for your business. And it’s about fortifying weak links in the chain to encourage more resilience in the face of external disruption.

Consumers are demanding greater environmental responsibility from corporations. Using sustainable practices at a company headquarters is a beginning step, but suppliers and partners have to be involved and invested in the practice as well. Some industries that work in the supply chain operations are automatically inclined to increase sustainability practices through their business model. The wooden pallet industry is a prime example of an industry that incorporates productive recycling practices that are absolutely in line with sustainability principles.

Many companies fail to realize the financial impact of waste in the supply chain. These costs tend to be hidden compared to upfront savings offered by suppliers. A closer look can reveal numerous processes where cost savings are negated. Disposing of excess packaging, paying for wasted water and energy, and costly shutdowns due to poor conditions can end up costing far more than those initial savings.

Taking the time to audit and eliminate wasteful practices at each step in the supply chain can result in lower costs. More importantly, it can also result in stronger, more resilient processes.

Companies can work directly with suppliers to reduce waste, decrease environmental impact, and improve working conditions. Each of these steps forges stronger relationships between companies and suppliers.

Those relationships allow all parts of the supply chain to work toward the common goal of business having a positive impact on the community. It doesn’t matter if that community is in the United States, Bangladesh, or France. Local impact is global impact.

Complex Supply Chains and Environmental Responsibility

As mentioned previously, a challenge for companies that want to green their supply chain is that they often do not directly control key parts of the chain. Factories and producers in developed countries generally have to abide by environmental regulations.

An effort to work with suppliers to exceed local regulations benefits their workers and their communities. Those suppliers become less fragile and prone to disruption and the supply chain grows stronger.

Those suppliers are also less likely to create environmental damage. Companies that knowingly use suppliers that are harming the environment may find themselves paying for portions of costly cleanup.

This can feel like an impossible task for many businesses. Even multi-national corporations struggle with the complexity of their supply chains. There may be hundreds of steps involved in creating a single product.

Everyone wants to be environmentally responsible, but where do you start? What are some basic green supply chain practices and what are some reasonable first steps?

What is Supply Chain Sustainability? – Part 2

Why is Supply Chain Sustainability Important?

The increasing concern about climate change by consumers and businesses alike has pointed to supply chain sustainability as a strategic goal for all participants in the chain. Supply chain operations, from sourcing, to distribution, to end-user, are an energy-intensive process.

Nations, governments, and business leaders have recognized the after-effects of these processes and have called for dramatic improvements in various worldwide climate summits like the Paris Agreement and the 26th UN Climate Change Conference in Glasgow. The medium-term goal within these actions is to reduce GHG emissions on a global scale.

Many industries, like fast-moving consumer goods (FMCG), logistics, and supply chain; are being scrutinized and called upon to provide plans and goals for sustainability in their operations. The new business leaders of these industries understand that their operations can have significant impact on the environment, which then flows through the social, political, and economic landscapes where they do business.

In example, Coca-Cola, who is a giant in the fast-moving consumer goods industry, utilizes its market reach to promote awareness of sustainability values and engage meaningfully with suppliers across its supply chain respectively. The 2020 Coca-Cola Business & Environmental, Social and Governance Report demonstrates the initiatives it is implementing within packaging, processes, and advocacy to redress its supply chain and communicate company-wide social responsibility and supply chain sustainability. In sustainable packaging, Coca-Cola’s goal is to make 100% of their packaging recyclable globally by 2025 and use at least 50% recycled material in all packaging by 2030.

For industries and companies like this example, it is up to the wooden pallet and packaging industry, as a service provider in their supply chains, to demonstrate the value of our products in achieving our customer’s goals for sustainability. Recycled wooden products do this by presenting sound, proven data that provides factual information for a customer’s sustainability initiatives.

Making a Supply Chain Sustainable with Wood Packaging

The goal of attaining a sustainable supply chain is to incorporate eco-friendly business practices in everyday operations, these include the use of recycled packaging and/or packaging derived from renewable resources. Achievement of a customer’s sustainability goals begins with important pillars that validate their goals and set up their operations for success with minimal disruption to any process:

Identification – companies identify areas of improvement along their supply chain from sourcing to packaging, to warehousing, to transportation. As operations are evaluated. The “low-hanging fruit” will highlight where the quickest positive environmental impacts will happen. This will help them jumpstart their development toward sustainability. As an expert in recycling processes and renewable wood products, you can guide them to quick wins that are identified at a granular level (read: pallet) and quickly coalesce into a significantly positive data point systemwide.

Collection – developing key performance indicators (KPIs) to use as a benchmark to track progress are integral to success. This helps businesses focus on their environmental goals. As an expert in recycling processes and renewable wood products, your input into those KPI’s will be critical. Luckily, all of this data is collected as a regular part of the services provided.

Commitment – service providers (like pallet companies) gain commitment from their customers by incorporating business practices that mirror the sustainability goals of their customers. This can include facility and yard tours that demonstrate real recycling processes in action and set expectations correctly with customers. Customers must understand that your services amplify their effort toward achieving their sustainability goals and contribute to their bottom line.

Connection – customers want to build on their successes in sustainability and engage with suppliers who understand this concept. Collaboration among businesses units within a customer’s business organization is compounded with optimization of their processes that reduces cost, waste, and environmental risks in the business operation. Wood pallets and packaging touches just about every business unit in some way, whether it be data, actual products, or services provided at the dock. Connecting those dots for the customer are crucial.

Evaluation – beyond KPI metrics there will always be the need to review and re-align with customer sustainability goals. These points of communication must be more than numbers in a spreadsheet or nice-looking reports with colorful infographics. An evaluation of service performance that is done regularly, whether quarterly or semi-annually, is integral to the progress of any sustainability initiatives. It will also help you as a service provider to address any concerns with the customer and help you achieve credibility as the invaluable sustainability expert that you really are.

Navigating successfully through these points to help a customer attain supply chain sustainability is complicated. Nonetheless, every wood packaging business in the industry should adopt these pillars to help promote our industry as sustainable, renewable, and recycling pioneers.

What is Supply Chain Sustainability? – Part 1

Supply chain sustainability is the comprehensive view and management of supply chain components, processes, and technologies deployed in business operations that have a direct or indirect impact on the environment, society, and economy. It includes endorsing good governance ethics throughout the lifecycle of products and services. Supply chain sustainability involves a business reflecting on the environmental and human impact of their production lifecycle from raw materials sourcing to production, storage, delivery, and all modes of transportation utilized.

The goal is to reduce environmental damage from component processes like energy consumption, water consumption, and waste production whilst significantly improving the lives of participants in the operating supply chain. Another important goal is to establish, protect, and develop a long-term social, environmental, and economic value for stakeholders, partner companies, government, and customers when bringing goods and services to market. To properly explore this subject, we need to define key terms:

Supply Chain: A supply chain is a collection of systems and processes that transform raw material into finished goods. Within this collection of systems and processes, there are multiple tiers of production and/or manufacturing, facilities in use for these operations, transportation across the spectrum of the operations, and all of the human capital involved in the movement of any product/ service from beginning of the cycle all the way to the customer.

Supply chain management: The act of coordinating raw material sourcing, production, distribution, and inventory among participants in the supply chain. It aims to maximize profit and gain a competitive advantage in the market by streamlining the commercial supply-side activities and operating as lean as possible to drive out costs whilst satisfying customer needs.

Climate change: Climate change according to the United Nation is the long-term alteration of temperature and weather patterns. The long-term trickle-down effect of climate change in business operations will see an increase in cost across all parts of the supply chain and affect the quality of goods delivered to customers. Natural disasters caused by climate change will test the level of flexibility in the supply chain with failure being the catastrophic result.

As we have written about greenhouse gases and climate change in a previous blog post, supply chain systems and processes are a large contributor to the greenhouse gas emissions that exacerbate climate change. GHG emissions lead to a higher temperature, more drought, and a rise in ocean temperature. A rise in ocean temperature further leads to intense hurricanes and other disasters that can disrupt global commerce. With a deteriorating climate condition, supply chain risks will only become worse.

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