A Glossary of Sustainable Logistics Terms
by Reusability, on May 12, 2023
What is Sustainable Logistics?
Sustainable logistics (or “green logistics”) is the practice of moving goods through the chain of commerce in a way that drastically reduces or eliminates waste, usually employing high-efficiency transport, reusable packaging assets, and a program of reverse logistics to return those assets to the original shipper. This is a key component of a circular economy.
With a central focus on reuse, sustainable logistics can have a massive impact on a manufacturer’s environmental impact and bottom line. But there are many factors to weigh when considering the move to reusable packaging and reverse logistics. What reusable package fits my product? How will the reverse logistics be managed? How do I forecast the ROI?
Questions like these are the reason we’ve compiled this handy glossary to reference for those of you who are either new to sustainable logistics or are looking for some quick help while researching, designing, or implementing a program at your organization.
Click here to learn more about Reusability’s sustainable logistics offerings.
Glossary of Sustainable Logistics Terms
Aftermarket
Those goods, parts, or components that can be used as replacements in a finished product or assembly, but which were not created by an original equipment manufacturer (OEM) for use in the original finished product or assembly.
Asset Fleet
See Asset Pool.
Asset Inventory
See Asset Pool.
Asset Inventory Management
The process of oversight, coordination, and administration of reusable packaging asset inventory throughout a supply chain. Accounts for assets in transit, at retail, or in storage, and tracks shrinkage in order to estimate asset replenishment needs.
Asset Labeling
The practice of affixing a label to each reusable packaging unit (or individual components of a unit) to aid in identifying, tracking, pooling, and recovering those assets. Labels can contain simple instructions for collectors and sorters, or include scannable codes for use in track and trace programs.
Asset Management Software
A proprietary portal customized to display information critical to reusable packaging management, including reusable packaging asset inventory location in a supply chain, asset amounts at supply chain nodes, assets in transit, shrinkage amounts, and estimates for asset returns. This software can include or aggregate data from multiple sources, including GPS, RFID, IoT, barcode scans, and manual reporting.
Ask us how Reusability’s proprietary asset management software can save you money.
Asset Pool
The total amount of a reusable packaging asset in current circulation within a supply chain, including assets in transit or in use/storage at any supply chain position (ie plant, distribution center, warehouse, etc).
Barcoding
The practice of employing scannable codes on goods or assets to aid in the tracking process of those assets throughout a supply chain. UPC and QR codes are the predominant barcode types used.
Bin
A large type of reusable transport packaging, predominantly made to sit on a pallet and carry large quantities of products. Bins can come in many shapes and sizes, and are used heavily for industrial and agricultural shipping. Many bins are designed to be collapsible for more efficient storage and transport during recovery and return.
Cable Reel
See Reel.
Cellular Communication Device
See Cellular Sensor.
Cellular Sensor
A piece of technology that is able to transmit and receive information and data over a cellular communication network. This is typically used in logistics in two ways: first, as a means of tracking the location of goods and assets in the supply chain in real-time using the triangulation of nearby cellular towers to any individual sensor and, second, in conjunction with IoT technology to allow for internet connectivity via a cellular network rather than relying on nearby Wi-Fi nodes.
Cellular Tracking Device
See Cellular Sensor.
Circular Economy
A broad term encompassing all economic and commercial practices that promote reuse, recycling, and regeneration of materials in order to drastically reduce or eliminate the waste and harmful environmental impact of existing systems of commerce. By shifting from historically linear processes to ones focused on recirculation of materials, the circular economy inherently addresses many key elements of industrialization that contribute to pollution, deforestation, loss of biodiversity, climate change, and other global issues. Reverse logistics is a major component of a functioning circular economy.
Closed Loop
A supply chain system whereby two different positions in the supply chain (often an OEM and a VAR) set up a repeatable and efficient cycle of product dropoffs and reusable packaging asset recoveries without the need for pooling or involvement of other supply chain positions. A good example is an OEM that produces and ships auto components in reusable packaging, unloads each shipment at the car factory and simultaneously recovers the prior shipment's reusable packaging for return to the OEM.
Crate
A generic term for a type of sturdy transport packaging used to carry bulk or heavy items, made to be packed from the top and typically able to be carried by hand. Crates come in many shapes and sizes. A large example is a shipping crate, and a more typical small example is a milk crate. Most crates are reusable, though some disposable crates can be made of wood.
Custom Packaging
Any packaging designed specifically for the needs of the product or goods it is carrying.
Disposable Packaging
Any primary, secondary, or tertiary product packaging that is designed for a single use and expected to become waste once it fulfills that use. Disposable packaging is usually made from cheaper and less sturdy materials than reusable packaging.
Full Truckload (FTL) Carrier
A freight carrier that devotes all space in any shipping truck to one shipper's goods, which fill the entirety of the truck's container.
Global Positioning System (GPS)
A navigational system that employs an array of orbiting satellites to determine the exact latitude and longitude of a radio receiver on the surface of the Earth. In logistics, GPS receivers can be affixed to goods, assets, and transport moving in the supply chain to determine their real-time whereabouts.
Intermediate Bulk Container (IBC)
A type of reusable transport packaging designed to sit on top of a pallet and specifically meant for carrying liquids, chemicals, solvents, grains, sand, powders, and pharmaceuticals. IBCs usually have a valve at or near the bottom for transfer of the contents into smaller containers.
Internet of Things (IoT)
A broad term referring to any network of objects embedded with technology that allows for the sharing of information and data using internet (or local network) connectivity. IoT can be used in reverse logistics for tracking and managing reusable packaging assets through a supply chain, and becomes more robust for this purpose with cellular communication abilities added to the technology.
Less-Than-Truckload (LTL) Carrier
A freight carrier that specializes in consolidating smaller freight shipments, typically from multiple shippers, into full truckloads in order to maximize efficiency, often using a wide network of transportation nodes and relays.
Open Loop
A more complicated cycle requiring multiple supply chain positions and product delivery nodes. In an open loop, reusable packaging assets are recovered from many of these these varied nodes, requiring reusable packaging management to coordinate recovery and return of those assets to their point of origin. Third-party recovery, asset pooling, sorting, refurbishing, and return is common in open loop systems.
Learn how Reusability helped save open loop customer MTD millions annually.
Original Brand Manufacturer (OBM)
A company that handles all design, engineering, manufacturing, and marketing of its products, including creation of all parts and components, thereby removing the need for an original equipment manufacturer to provide parts or components.
Original Design Manufacturer (ODM)
A company that designs and manufactures products licensed by other brands for white-labeling, marketing, and distribution. They typically source parts and components from a original equipment manufacturers.
Original Equipment Manufacturer (OEM)
A company that creates goods, parts, or components used as part of a finished product or assembly by another manufacturer (like an original design manufacturer or value-added reseller).
Pallet
A platform designed to be stacked with goods for shipment or storage and movable by standardized equipment, like a forklift or pallet jack. Pallets are typically made of wood and considered disposable, but can also be made from plastic or composite materials and reused.
Pickup
See Recovery.
Pilot Program
The implementation of reusable packaging management on a small subset of a larger supply chain (for example, a single region instead of nationwide) with the purpose of testing and adjusting any assumptions made during the transportation planning process in order to grow the scale of the overall reusable packaging program to accommodate the larger supply chain in an efficient and cost-effective manner.
Pooling
The practice of consolidating small quantities of an asset from various locations in order to consolidate them for more efficient transport, ideally using full truckload (FTL) shipments. This is particularly helpful in managing reusable packaging assets in open loop systems where any individual retailer or distribution hub would not have sufficient quantity of an asset to fill a truckload for return to a manufacturer.
Primary Packaging
Packaging that directly contains a product, usually acting as the single retail stock-keeping unit (SKU). Primary packaging is usually intended to be disposed of or recycled after use. Examples include: soda cans, clothing poly bags, candy wrappers.
Quick Response (QR) Code
A type of scannable matrix barcode used in logistics primarily to track goods or assets through the supply chain. Any QR code can also direct the scanner to a webpage to find more information or instructions (ie how to assemble/disassemble/sort units), making it a more flexible tool than a UPC code.
Rack
A type of reusable secondary or tertiary packaging that employs metal posts (typically steel or aluminum) and adjustable shelving. Racks are used to aggregate products for shipment and, in many cases, to be utilized for retail display. One example is the steel nursery racks used to ship and display plants and flowers at garden centers.
Radio Frequency Identification (RFID)
A means of identifying objects within a supply chain by utilizing wireless radio frequencies to convey the information stored in an object's RFID tag to a nearby terminal, usually linked to a centralized computer or network that displays the information. Nearly any object can be tagged with RFID, and the receiving terminals can be fixed, mounted, or carried.
Recovery
The process of picking up reusable packaging assets from a node or multiple nodes in a supply chain to prepare them for return to their point of origin.
Reel
A type of transport packaging resembling a spool, and used for transporting various types of wire and cable, usually for industrial use or for utilities. Reels are most often made from wood and considered disposable but can also be reusable and made from plastic, steel, or composite materials.
Refurbishing
The process of repairing any reusable packaging asset or one of its component pieces to ensure it is fit to be reused in the supply chain.
Replenishment
The process of moving either new or refurbished reusable packaging assets into a supply chain's circulating asset pool. Replenishment is often triggered when shrinkage nears a rate where too few assets would be in circulation to carry the necessary product shipments.
Return
The process of shipping (and dropping off) reusable packaging assets to their point of origin after recovery of those assets from other supply chain positions.
Return on Investment (ROI)
A calculation used to evaluate how well the investment in any asset has fared over a period of time. Typically calculated as: Net Benefit / Investment Cost. For packaging assets, companies often use some variation of TBO / TCO to determine ROI.
Returnable Asset Management
See Reusable Packaging Management.
Returns Management
A type of reverse logistics specifically focused on bringing consumer returns back to their manufacturer for a consumer refund. This system involves the use of consumer return hubs, which can often be retail locations or regional warehouses that aggregate the returned products and process them for shipment back to the manufacturer.
Reusable Asset
See Reusable Packaging.
Reusable Asset Management
See Reusable Packaging Management.
Reusable Crate
Any crate made from a reusable material, such as plastic, steel, or composite materials. Some reusable crates come in standardized sizes, usually made to fit on pallets, and others are custom built to house specific products.
Reusable Packaging
Any primary, secondary, or tertiary packaging used in the shipment or return of goods that is designed to be used multiple times, usually with the expectation of a long lifecycle, before it is recycled or disposed of. By necessity, reusable packaging is made with sturdier materials than disposable packaging.
Reusable Packaging Program
See Reusable Packaging Management
Reusable Packaging Management
The programmatic oversight of all logistics and administration required to employ reusable packaging as efficiently as possible throughout a supply chain. This includes asset inventory management, asset recovery, and asset return. A reusable packaging management program is either handled by a third party provider with integrated offerings to manage these multiple functions or by an in-house team coordinating a number of independent vendors to execute all necessary functions.
Reusable Pallet
A pallet specifically made from sturdy plastic or composite materials to allow for its recovery and reuse.
Reusable Plastic Container (RPC)
A type of reusable transport packaging typically designed to stack on a pallet, and intended for use in the shipping of agricultural or industrial materials, including bulk foods, liquids, and powders. RPCs come in many sizes and are often designed to be collapsible for efficient storage and transportation during recovery and return.
Reusable Shipping Crate
A large crate made from metal (typically steel), plastic, or composite materials intended to be recovered and reused. Often, reusable crates are designed to be collapsible and stackable to allow for efficient storage and transportation during recovery and return.
Reuse
The process of using an asset multiple times to reduce waste and increase efficiencies, usually reducing costs and impact on the environment compared to use of disposable assets.
Reverse Logistics
A generic term to describe the process of recovering assets, either products or packaging, for return to their point of origin from their final point of use in order to be reused, recycled, refurbished, or replaced. This can involve either reusable packaging management or returns management (or some combination of both).
Secondary Packaging
Packaging that contains a designated number of primary packages, providing some protection for the products in distribution. Secondary packaging can act as a shelf-ready retail package and/or be designed for inventory storage, and is usually intended to be disposed of or recycled after use. Some secondary packages, like nursery racks, are reusable. Disposable examples include: cardboard cases for soda cans, shrink-wrapped groups of a product, corrugated carboard boxes holding multiple boxes of cereal.
Shelf Bin
A type of reusable packaging asset, either disposable or reusable, designed to fit on a rack to carry products during shipment. Usually multiple shelf bins are employed on each rack shelf.
Shipping Crate
A type of crate designed to fit on top of a pallet and hold large quantities of products for shipping. Shipping crates are typically made with solid wood side panels and considered disposable packaging, but can be made from metal, plastic, or composite material and reused.
Shrinkage
A reduction of the quantity of assets from the total inventory, usually due to loss, destruction, scrap, or theft. Shrinkage is an important consideration when dealing with reusable transport packaging to maximize ROI on a reusable packaging program.
Supply Chain Position
The specified role within any supply chain that a given player in the chain fulfills (ie manufacturer, distributor, returns processor, transportation hub, recovery warehouse, etc).
Tertiary Packaging
Packaging that bundles many secondary packages together for shipment, typically to warehouses and distribution centers, and is rarely seen by the consumer. Tertiary packaging can include many types of reusable transport packaging, such as plastic pallets, clothing return totes, and steel crates. Some disposable examples include: wood pallets, wood crates, cardboard shipping boxes.
Total Benefit of Ownership (TBO)
The estimated or actual value an asset brings to a company. TBO is typically balanced with total cost of ownership (TCO) to determine the estimated or actual ROI for any asset.
Total Cost of Ownership (TCO)
The estimated or actual sum of all expenses accumulated in an asset's lifecycle of use. These expenses can include (but are not limited to) purchase price, cost of upkeep/refurbishing, and disposal/decommissioning cost. TCO is typically balanced with total benefit of ownership (TBO) to determine the estimated or actual ROI for any asset.
Trying to understand your TCO with reusable packaging? Contact us to help!
Tote
A type of reusable packaging unit often made from plastic or reinforced fabric specifically meant to be carried by hand.
Track and Trace
The recording of an asset's movement through the supply chain, typically aided by technology like asset management software, scannable codes, or embedded technologies like RFID, GPS, IoT, and cellular sensors.
Transport Packaging
A generic term referring to those types of packaging used to bundle and protect large quantities of products (or large products) during shipment. Usually tertiary packaging types like shipping crates or bundled pallets, sometimes primary or secondary packaging can also be used as transport packaging, like mower shipping crates (primary) or display-ready nursery racks (secondary). Transport packaging can be either disposable or reusable, depending on the material used.
Transportation Planning
The process of mapping out the most efficient transportation of goods and assets through a supply chain, including selection of transportation hubs based on proximity to manufacturing plants, distribution centers, and other critical supply chain nodes.
Turn
The term for a single completed trip through a reverse logistics supply chain for any reusable packaging asset, starting from the point of origin, continuing to delivery of the packaged product(s), and ending with return of the asset to the point of origin for reuse.
Turn Rate
The number of turns completed over a designated amount of time (ie 1 turn/month or 12 turns/year). Turn rate can be used both as an input in a company's ROI calculation for their reusable packaging and as a projection used in the transportation planning process.
Universal Product Code (UPC)
A widely-used type of scannable barcode for tracking goods, used in logistics to track assets through the supply chain.
User Portal
See Asset Management Software.
Value-Added Reseller (VAR)
A manufacturer that assembles goods, parts, and/or components from original equipment manufacturers (OEMs) to create a final product, typically ready for the end consumer. For example, an auto manufacturer is a value-added reseller that assembles components from OEMs in their vehicles, then ready for end consumers.
