To develop a singular system that addresses the economic, environmental and social issues that are inherently lacking in our current global distribution systems.
The COVID-19 pandemic has opened our eyes to the fragility of our world and the systems we use to manage it especially for less developed countries and their inhabitants. Less developed countries pay a disproportionate price economically, environmentally and socially when these same systems fail to function as they were designed to. This simply isn’t right, so we set about to determine how we might be able to level the playing field to be more equitable for all. This had us wondering where to start and what might be the simplest solution that addresses the triple bottom line simultaneously with a single system?
Policy change takes forever and economic interests always seem to hold sway over any changes to current systems with environmental and social issues always taking a back seat to the problems at hand. So, we started to study which of these systems singularly created the most of these problems hoping to somehow reverse engineer that singular system to find solutions to the problems it created. After careful deliberation, we realized that there actually was one singular overriding culprit to much of our planet’s problems; our current supply chains. And, if supply chains were the culprit, then how could we develop a solution that addressed the economics as well as the environmental and social aspects on equal measure and all within a single system?
We soon began to realize that, if we could come up with a solution that limited the environmental effects of supply chains, then the economic and social issues might take care of themselves and, as we moved this thinking forward, we were able to firm up that hypothesis. From an environmental perspective we focused our efforts on eliminating empty back hauls (trucks or steel shipping containers returning empty after their delivery). Our current supply chains actually ship more air than they do merchandise because of empty back hauls, partial loads and excessive packaging.
Partially filled trucks are the result of small shipments being transported by themselves and are usually referred to as LTL (Less Than Load). They’re also very expensive because, due to time constraints, these small shipments are often all that’s on a truck when it hits the road. This leaves an enormous amount of wasted space that could be used if other small shipments destined for the same neighborhood could be pooled or consolidated with it.
And, even if these shipments could be consolidated, they are still only utilizing half of the available space because any pallet that is carrying merchandise stacked higher than four feet is vulnerable to toppling over in transit. An effort to stack pallets on top of each other will crush merchandise underneath so trucks are still only “partially” filled to avoid this problem. Transportation is a major contributor of greenhouse gas (GHG) emissions, a leading cause of climate change. So, if we could completely “fill” every truck on both delivery and return trips we could cut the number of trucks on the road dramatically.
Steel shipping containers rarely suffer partial loads but have a problem that is unique unto themselves; they need to be constantly re-positioned to where they will be needed next and this costs the industry about $20 billion annually just to re-position these containers. Whether they’re full or empty, the environmental costs are the same but the economic costs are considerable.
There’s another side to the supply chain referred to as reverse logistics or the reverse chain. It’s the movement of “distressed” inventory back up the chain. Distressed inventory refers to store returns, overstocks, outdated merchandise, freight damages, perishable goods, seasonal products, label changes, the list goes on. All this merchandise needs to find a home or it ends up in landfills and most of it still has considerable value. They used to lump all of it under the term “salvage” in the retail industry but are now realizing the true value of this merchandise as feed stock for other value chains which actually creates the start to a Circular Economy.
We quickly realized that this reverse chain could alleviate these empty back hauls by filling trucks with distressed inventory for their return trip but, until trucks had delivered their load, this distressed inventory just got in the way. You had to make all your deliveries and then come back to pick up the salvage. There was no efficient way to do both at the same time.
Putting it all together we came up with a single system to address all of these problems and we’ve named this new innovation the Cargo Carousel System. If supply chains eliminated the use of cardboard boxes, wooden pallets and plastic wrap in exchange for the sturdy, re-usable, opaque, lockable and sealable “modules” of the Cargo Carousel System they could drop off and pick up these modules simultaneously on the same trip. They could also consolidate or pool the loads of as many different small shipments as they could handle to keep their trucks full in any direction up or down their routes while alleviating the need for route optimization software.
The spillover effects are considerable.