The Essential Role of Logistics in a Growing Circular Economy

In today’s world, the basic model for the production of goods is linear: natural resources are extracted and turned into products that are used for a limited time. While some of these products are recycled, most eventually end up in the world’s landfills. This model is becoming increasingly unsustainable and expensive for businesses. Commodity prices rose more than 150 percent between 2002 and 2010 and an additional three billion middle-class consumers are expected to enter the global market by 2030. This unprecedented demand for goods and services coupled with increasing resource scarcity and price volatility is causing companies to move from a traditional “take-make-dispose” model to a more circular strategy. Beyond the cost, there is increasing awareness of the impact of the linear model on the well-being of the planet, and a growing sense of urgency as we see the ultimate ramifications on society and the environment.

I believe this shift will only be possible through collaboration across multiple industries and business segments. Companies will need to commit to examine the inner workings of their manufacturing process and supply chains to identify areas for improvement. Increasingly, more companies are looking for help in implementing viable, sustainable solutions across their operations. According to a recent study by GreenBiz and UPS, nearly nine out of ten sustainability executives believe the circular economy will be important to their business two years from now, yet they believe one of the largest barriers is the logistical costs associated with implementing real change. As a global provider of transportation and logistics services, UPS is acutely aware of how intelligent logistics plays a critical role in the circular economy. This is why it is important to invest in creating lasting solutions that will help revolutionize the global economy and allow businesses to move toward building more sustainable, circular supply chains.

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Tamara Barker is UPS Chief Sustainability Officer and Vice President of Environmental Affair