Q&A with Paul Young, Head of Packaging Services, DHL Supply Chain
Supplied by DHL Supply Chain
Paul Young (pictured) at DHL Supply Chain looks at future packaging trends
DHL commissioned a study of the future, "Delivering Tomorrow: Logistics 2050", what were the key findings?
The central finding of the study is a comprehensive collection of five credible visions of the future. They outline how different the world could appear in 2050 in terms of the degree of globalization, the extent of economic and social development, predominant technology standards and environmental conditions. The study describes five far-reaching, occasionally radical, versions of life in 2050. All scenarios share a common element: the broadly transformed role of logistics. Overall demand for logistics services does indeed climb in most of the five alternative scenarios. But the particular requirements placed on logistics providers and the special challenges they face vary widely from scenario to scenario.
Is the packaging industry really changing from the traditional cardboard box?
We are starting to see innovative new substrates that provide realistic sustainable alternatives for where we have to use packaging. We have examples of bamboo and even mushrooms being used by the more innovative companies today. Some companies are researching the use of straw as a raw material from which a box can be formed. We see exciting developments in both edible and dissolvable packaging. I will be providing examples of these in my presentation.
The packaging industry really hasn’t moved on much in the last 20 or even 30 years. We need to take notice of what today’s savvy consumer is concerned about, and that includes less waste. It is true that we re-cycle cardboard, but take into account the energy that is used to do so and we are still wasting precious resources. We need to see more re-usable packaging, particularly around the secondary packaging requirements.
There are more than 25 "megacities" around the world all set for major growth over the next 10 years, with megacities comes mass packaging and food waste – how will the packaging industry respond, and help find a solution?
In the scenario’s I will be presenting at the Packaging Innovations event at the NEC later this month, I will be demonstrating how some companies are reducing and avoiding unnecessary packaging. This is certainly a trend that will continue with the growth of the megacities. We can ship consumer goods in bulk from the manufacturing point to a local megacity consolidation point. Bulk shipping has less of a requirement for secondary packaging, and where it does, re-usable containers can replace most, if not all, of the secondary, or transit packaging that is used today.
The consumer is becoming increasingly aware of food waste and we should see habits changing over the next decade. In the meantime, as a business DHL has expertise in eliminating the need for land-fill waste for both packaging and food. We have invested in the use of waste driers that remove all moisture, reducing food waste to a dry powder that can be mixed into compost or burned for fuel. Using this system for some customers, British Airways for example, has reduced the landfill to zero landfill.
What packaging Innovations can we expect to see in the next 12 -18 month years?
Although I shall be presenting what the future looks like in 2050, we take a look at the innovations that are starting to emerge, giving us an insight into the step change between the now and the future in 2050.
Personally I don’t see any real innovation, or game changing packaging with the next 12 to 18 months. Just more tinkering. Yes, there are new films being developed, someone’s thought about a new label, but as for the cardboard box replacement? I’m sorry, I don’t see it yet. You can rest assured though. I will be promoting the avoidance and reduction of secondary packaging during this time.
What recent trends have you noticed regarding packaging efficiency?
I am really concerned about the emergence of e-tailing and how this is effecting packaging. Increasingly, more and more retailers are selling more and more products over the internet. Little thought is given into how they should be packaged. This is clearly impacting on efficiency, but more worryingly we are seeing potentially harmful situations where liquids and solvents are being packaged into re-used cardboard boxes with little or no thought given to protection or barriers to prevent damage or leakages.
There are examples of both the small corner shop, and the large e-commerce sites getting it wrong. The good news is that the supply chain has now met with social media. You only have to look at sites like Facebook and twitter to see that consumers are highlighting some of the ridiculous practices that are emerging particularly around packaging sizing. We have all seen the cardboard box, from the on-line retailer, turn up that is far too big for the letter box, and when opened, and we have removed the vast quantities of brown paper wadding, we pull out the small packet of razor blades that we ordered.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector