The law of unintended consequences tells us that actions, especially on a large scale, may have surprisingly unexpected results. Take the eCommerce boom. The $350 billion eCommerce industry (in the United States) has transformed the retail and delivery business and given the customer greater control of the buying experience.
It has also caused a tsunami of cardboard boxes. This comes at both an economic and environmental cost. More than 35 million tons of containerboard were produced in the United States in 2014, with eCommerce companies among the fastest-growing users, according to a recent article in the New York Times. Today’s consumer can order anything online with no order too big or too small for (sometimes even same day) delivery to the doorstep. Boxes inside boxes protect electronics, jewelry, or groceries as they make their bumpy way to your door.
About 90 percent of cardboard packaging is recycled, according to the corrugated packaging industry. But recycling has its own costs, including the emissions from shipping the material to recycling centers, and the water and energy used in the recycling process. As consumers start to consider the waste they are creating, retailers are likely to focus efforts on sustainability solutions, including less packaging for shipments.
The U.S. Postal Service, too, might be a victim of unintended consequences when it comes to its shipping materials. A major beneficiary of the eCommerce boon, it is also a major purchaser of corrugated boxes. World demand is expected to increase 3.7 percent per year through 2019, approaching 260 billion square meters, according to a recent report from the Freedonia Group. Falling prices for raw material have kept corrugated box prices in check the past 2 months, but some analysts say buyers should expect modest price increases in paper and packaging markets this year.
An OIG audit report from 2011 said the Postal Service spent $158 million for Express Mail and Priority Mail supplies in fiscal year 2010. That number increased to $192 million in FY 2015.
The Postal Service offers packaging supplies for its domestic and international Express Mail and Priority Mail products free of charge. It gives packaging supplies away to attract and retain new customers, increase on-time performance with clearly marked packages, and reduce the number of weak shipping containers in the mail. Free packaging differentiates the Postal Service from its competition.
However, because the supplies are free and readily available at all post offices, some customers use the boxes, envelopes, and labels for other purposes, such as shipping with competitors or using the labels for an art form known as graffiti slaps.
Do you think free packaging supplies for Express and Priority Mail is the right strategy for the Postal Service? Are there alternate shipping containers that are economical to produce, yet more sustainable?