Close this search box.

Circular economy enables new logistics business models, report says


The circular economy requires long-term cooperation with logistics providers acting as consultants and facilitators along the way, a new white paper has stressed.

Circular Economy in Logistics by Arvato Supply Chain Solutions recommended that companies collaborate with their customers and suppliers both up and down the value chain. While, logistics providers must invest in technologies like on-demand packaging that can help prevent or cut down on waste.

The report states that all materials used must be recyclable and reusable. In the medium term, logistics providers are expected to support their customers in remanufacturing and reusing, since they already have the necessary networks to return and ship products.

In the long term, they should also be able to repair and refurbish products. However, because this is not yet common practice, logistics providers still need to build the necessary expertise and fundamentally rethink how the value chains are organised and proactively engage suppliers and customers in this conversation.

“The circular supply chain is the future,” said Andreas Barth, president tech vertical at Arvato Supply Chain Solutions.

“It converts waste into opportunities as requirements for recycling and proper disposal of manufacturing byproducts become more stringent. If companies want to remain profitable in the upcoming decades, they need to recognise the importance of the circular supply chain model and start implementing the necessary steps.”

Furthermore, Robert O’Mahony, head of sustainability, global operations at Logitech provided advice for starting the journey toward circularity. He said: “First, start with the data. Second, get motivated and get your entire company motivated around that data to understand how much of a difference you can make as an individual. Third, think beyond carbon. Think beyond the climate. We can’t have a healthy economy unless we have a healthy society and a healthy planet.”

Circular solutions are also outlined in the white paper. For example, Arvato provides several of its customers from the high-tech industry with circular services such as testing, reconditioning and dismantling old and defective equipment. In the process, recovered components are returned to the value chain either as B-goods or as spare parts or raw materials for new devices.

“We prefer to drive change rather than follow it,” explains Paul Brolly, vice president global business development & solution design, Arvato Supply Chain Solutions.

Arvato has already deployed innovative packaging machines in its warehouses. These machines reduce the amount of cardboard used and empty space, resulting in lower CO2 emissions. The company also offers circular solutions in fashion logistics, where returned items are cleaned, inspected, minimally repaired and returned to the warehouse or donated, leading to greater sustainability. It said after all, second-hand and vintage stores are popular with Generation Z consumers.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on