Bringing the benefits of pooling to your value chain

written by IFCO SYSTEMS, 19th јануар 2022, in Stories

A shift away from asset ownership is underway. Resources are scarce and expensive, making traditional approaches to managing supply chain assets increasingly unsustainable. Discover the benefits of pooling reusable packaging with the IFCO closed-loop system. With our share, reduce and reuse model, you avoid waste, conserve resources and reliably increase the efficiency of your supply chain.

But first… what does "pooling" mean?

"The best way to reduce capital expenditure is not to buy something outright in the first place," says Rustin Durden, Vice President, Asset Management at IFCO. "Instead, you need to step back from the traditional mindset of owning or renting a designated asset and embrace the compelling benefits of sharing and reusing resources."

How does pooling work in practice?

In many major cities around the world, we can already experience how sharing resources works on a more personal level. Sharing of cars, bikes and even high fashion items and workspaces is increasingly accepted as a more efficient way to get the most out of resources while cutting down on upfront costs and carbon footprints. Sharing and reusing resources works equally well in logistics.

How does pooling work in the supply chain?

In logistics management, pooling describes the sharing and reusing of supply chain assets. Unlike rental or proprietary systems where such assets are used by one party only, pooling ensures that resources are kept in continuous circulation and use. No asset ever sits idle for longer periods of time. Optimal usage ensures greater efficiency. Customers can also use the number of assets they need whenever they need them.

In the specific case of IFCO, our sophisticated pooling system for Reusable Packaging Containers (RPCs) goes above and beyond any definition you’ll find in a dictionary or from any other service. IFCO is setting the pace when it comes to shaping the benefits of sharing and reusing sustainable packaging.

What makes the IFCO pooling system so unique?

"As well as efficiently managing, matching and delivering RPCs on demand to producers and retailers around the world, we operate a pool of 100% recyclable RPCs in a smart closed loop," explains Durden. "Hence the name, IFCO SmartCycle™."

This loop has been perfected to flow efficiently throughout the manufacturing, use and recollection of IFCO RPCs, with each RPC reused up to 120 times. It is a truly circular model that runs smoothly through sharing and reuse, cleaning and sanitizing and the recollection and inspection of RPCs. It also flows all the way round to the granulating and feeding of unrepairable RPCs back into the manufacturing process and into the production of new IFCO RPCs. As a result, it forms an infinite closed loop.

“Our purpose is to make the world’s fresh grocery supply chain sustainable. We deliver on our purpose by replacing single-use packaging while making our share and reuse business model even more sustainable.”

Iñigo Canalejo , IFCO Vice President, ESG

"We really are the specialist in the food-safe pooling of reusable crates for fresh produce, fruit and vegetables, bread and baked goods, as well as meat and dairy," Durden adds. "At IFCO, we don’t simply rent out crates, we provide a full-service pooling system for reusable containers. Our closed-loop circular economy model puts sustainability center stage, and thereby ensures that our processes respect the environment."

As the IFCO pool works at considerable scale, it provides a powerful infrastructure on both a global and regional level to combat all kinds of waste, inefficiencies and challenges in the global fresh grocery supply chain. The benefits of pooling the IFCO way are considerable.

8 benefits of pooling reusable packaging

The IFCO SmartCycle™ targets exactly those supply chain challenges that are typically front of mind for producers, warehouse operators and retailers alike.

1. Reduce your environmental impacts 

The IFCO way is renowned for targeting food waste, solid waste, and carbon emissions. And for investing in world-class technology for designing, manufacturing and recycling reusable containers. We pursue a sustainable strategy, so our customers and ultimately consumers reap the benefits of pooling for the long term.

2. Boost efficiencies

Using the same standardized RPCs as 15,000 producers and more than 300 retailers reduces your freight costs and improves reverse logistics. Whether you operate across one region or many, the IFCO infrastructure will provide short, efficient and timely transport routes, enabling you to reduce your carbon emissions, save costs and meet demand.

3. Minimize your investment costs

By sharing supply chain assets, you automatically reduce your capital expenditure. There is no major investment on your side when you join the IFCO pool. You don’t purchase or store packaging for long periods, and you certainly don’t need to set up washing and recycling centers. Instead, your shared assets pass through best-in-class IFCO facilities.

4. Ensure better inventory management

How will pooling help you meet surges in demand? Pooling provides more flexibility and efficiency for your fresh grocery supply chain – without any hidden costs. By providing access to a larger pool of a broad portfolio of reusable crates, IFCO ensures that you can react rapidly to changes in demand, without the need to stockpile packaging just in case.

5. Benefit from IFCO investment 

Your operating expenditure is more transparent and directly linked to your requirements. Your costs are kept low as you benefit from IFCO investments in optimizing packaging designs, food-safe sanitization, and pooling infrastructure. You can also rest assured that you will have access to high-quality reusable packaging with the same dimensions in the future.

6. Simplify handling and automation

With the IFCO standardized design, you get to benefit from our expertise in automating warehouse facilities. The precise dimensions of our durable crates facilitate sturdy stacking, easy transport, and rough processing with industrial equipment. Also, as multiple partners rely on IFCO RPCs, we are proficient in identifying and implementing best practices in cost-efficient automation.

7. Benefit from shared resources

When you share IFCO supply chain assets you automatically benefit from shared resources across this complex logistics operation, including the skilled labor at our wash centers and the shared international infrastructure. This infrastructure has also been scaled up and optimized to the tough and stringent requirements of a sustainable fresh grocery supply chain.

8. Ensure regulatory compliance 

We see an increase in ambitious government recycling targets for food packaging, such as the EU Packaging and Waste Directive. This now sets a recycling target rate of 70% for all types of packaging by 2030. Our model goes above and beyond those targets, as we reuse 100% of the material from unrepairable IFCO RPCs to produce new IFCO reusable crates.

Why is pooling better for the environment?

Pooling reusable packaging is the perfect example of the circular economy in action. Ideally, according to the principles of circularity, the goal is always to reduce, reuse and recycle materials.

IFCO RPCs automatically reduce the amount of packaging in circulation, both single-use and reusable packaging. By sharing IFCO RPCs, you also reduce the amount of packaging that is needed. Instead of hoarding reusable packaging in warehouses, the assets are put to good use and remain in circulation. As the IFCO pooling model also takes care of repairing and recycling of the packaging within a closed-loop system, it also reduces waste. By ensuring 100% recycling of material into new IFCO RPCs, there’s zero waste.

Pooling is therefore infinitely better for the environment than disposing of single-use packaging or outsourcing recycling to other service providers.

How does IFCO pooling reduce solid, energy and food waste?

"What enters the IFCO loop, stays in the IFCO loop," continues Durden. "The clever design of our SmartCycle™ ensures that our RPCs are used, shared, reused and completely recycled into new RPCs. By granulating our old RPCs, we use the same material for new RPCs. This system fully closes the recycling loop, which means we have zero waste from our RPCs."

But waste comes in many forms across the fresh grocery supply chain. Reducing energy and water consumption is better achieved as part of a high-performance pool, for instance. IFCO RPCs reduce your supply chains’ impact on the environment by ensuring fewer natural resources are required and less packaging waste is produced.

Food waste is also a particularly pressing issue in the global fresh grocery supply chain. The highly protective design of IFCO RPCs in our pool reliably cuts down on food damage and loss during transportation and food waste at the retailers and in consumers’ homes.

No alternative: pooling reusable packaging is the best option

"Sharing and reusing packaging is better for the environment. That is common sense but it has also been scientifically proven. Using IFCO RPCs helps you achieve both costs and environmental savings across your fresh grocery supply chain," explains Iñigo Canalejo, Vice President, ESG (Environmental, Social and Governance) at IFCO. "Our purpose is to make the world’s fresh grocery supply chain sustainable. We deliver on our purpose by replacing single-use packaging while making our share and reuse business model even more sustainable."

"Our operations will be carbon neutral by 2025," continues Canalejo. "We will eliminate waste entirely from our business and achieve net zero emissions by 2040."

Why pooling is at the core of the IFCO 2025 ESG strategy

How IFCO will achieve these goals is defined by our 2025 ESG (Environmental, Social and Governance) strategy and outlined in our 2021 ESG report, Thriving in the circular economy. Primarily, we are setting transparent, measurable and ambitious targets for the future. The main objectives of our ESG strategy include combating climate change, eliminating waste caused by single-use packaging and reducing food waste, which are the very objectives that are underpinned by the IFCO closed loop pooling system. The IFCO business model and pooling system is rooted in sustainable principles," adds Canalejo. "We have fostered and enhanced those principles since the day the company was founded 30 years ago. And we intend to keep on leading sustainable practices in the future."

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