BONN: Deutsche Post DHL has joined the Ellen MacArthur Foundation to develop logistics models for the expanding Circular Economy.
The move follows the December purchase by FedEx of reverse logistics 3PL Genco. With US$1.6 billion in annual revenue, the Pittsburgh-based company is a self-described "forefather in reverse logistics – providing triage, test and repair, remarketing and product liquidation solutions" to technology, consumer, industrial, retail and healthcare customers.
Ellen MacArthur says moving to a circular economic model - where products are returned, remanufactured and reused by design - would save US$1 trillion in materials by 2025 "while reconciling the outlook for growth and economic participation with that of environmental prudence and equity."
In January last year, the World Economic Forum (WEF) launched 'Project Mainstream', a collaborative project which could help businesses shift towards a circular business process and save US$ 500 million in materials and prevent 100 million tonnes of waste globally.
Last month the WEF followed up by announcing three programs covering plastic packaging, paper and paperboard production, and electronic goods asset tracking as a next step in the process. Involving 30 global companies, the project is driven by the CEOs of Brambles, Brightstar, BT, Desso, Royal DSM, Ecolab, Indorama Ventures, Kingfisher, Royal Philips, Suez Environnement and Veolia.
Sir Ian Cheshire, recently retired CEO of Kingfisher, says adopting a circular economic model is an opportunity too good to miss: "It can drive our next generation of innovation and business growth, cushion our business from price volatility, provide us with competitive advantage, and help us build better relationships with customers and suppliers."
Commenting on the DHL move, Ellen MacArthur Foundation CEO and former McKinsey partner Andrew Morlet said: "Reverse logistics is an important enabler in the transition to a circular economy and Deutsche Post DHL will play a key role in providing new insights and collaborative opportunities within the program."
McKinsey calculates that US$390 billion worth of consumer electronics and household appliances reach end of life every year. The company says the industrial Internet and the 'Internet of Things' can be used to extend the life and value of these products by addressing the information gaps that prevent better decision-making on what to do with a product when a (first) user is finished with it.
Christof Ehrhart, EVP Corporate Communications and Responsibility at Deutsche Post DHL added: "We all know that resources are limited, that our climate is being affected by carbon emissions, and that our consumer behavior may lead to greater problems in the future. Joining ideas and forces to tackle these challenges is an important step for coming generations."