The trend of Circularity aims to eliminate waste and pollution by considering the full product life cycle beforehand and designing and utilizing each item and its constituent parts to be returned in the supply chain. This trend seeks to reuse, repair, remanufacture, and recycle products as much as possible and, when these processes are no longer achievable, products are broken down into reusable components and raw materials and ultimately biodegraded.
Although sustainability is a high societal priority, only 8.5% of the 100+ billion metric tons of material consumed annually worldwide are recycled into the economy. As described in the DHL white paper Delivering on Circularity, the transition to a circular economy requires a shared, concerted effort from 4 major stakeholder groups – businesses, customers, governments, and logistics players. In the past 2 years, recognizing the business opportunities, major brands have committed to circularity and made significant progress with buyback and resell programs and reusable packaging. However, as supply chains transform from a straight one-directional line into a regenerative circle, it is the logistics industry that is truly the backbone of Circularity.
As the concept of circularity requires dramatic transformation of the processes of product design, production, and recycling, supply chains are a key enabler in transporting raw resources, goods, and waste among a new network of users in a sustainable manner. Circularity as a trend is therefore anticipated to significantly impact the logistics industry, with logistics players becoming essential sources of knowledge for the transfer of best practice across sectors. Despite the growing number of industry verticals developing circularity use cases and applications, many companies in logistics are only trialing these models. It will take some time for Circularity to reach maturity and become mainstream.