Sustainability, failures of the PPWR, digitalization and technologies, new geographic and product markets, plus the Dora plastic pallet were all part of the conversation with IFCO’s Michael Pooley
IFCO Systems is a leading international provider of RPC rental services. In 2022 it celebrated 2 billion reusable packaging shipments. Michael Pooley, CEO of IFCO Systems, was recently interviewed in a German language publication. Here are some insights from that article.
IFCO’s circular economy approach
Pooley began the interview by emphasizing IFCO’s circular economy approach, ensuring no waste generation and infinite recyclability of materials, a unique aspect of their business. This approach incorporates innovation and responsible production, working collaboratively with various partners in the supply chain.
Environmentally, the company strives to mitigate climate change impacts by reducing water usage and consumable waste. Historically, fresh produce supply chains have been inefficient, generating excess waste and carbon emissions. IFCO made significant strides, saving 627,000 tons of CO2 the previous year.
Socially, IFCO operates in over 50 countries and prioritizes the welfare of its employees. They contribute to societal well-being, particularly in supporting food distribution networks and tackling hunger, aligning with the SDG of “No Hunger.”
IFCO aims to intensify these sustainability efforts. By 2025, they plan to exclusively use sustainable energy sources, and by 2040, they will achieve CO2 neutrality. This involves reducing their partners’ CO2 footprint and making transportation more sustainable. IFCO’s growth is seen as beneficial for the environment, corresponding with increased emission savings.
European politics and PPWR
Pooley commented on the prospects for EU’s Packaging and Packaging Waste Regulation (PPWR). To date, it has been a triumph of packaging industry lobbyists and the consumer products industry’s fear of change.
“The intention behind the PPWR is good,” he said, “but unfortunately the EU is torpedoing its own legislation by allowing the EU Parliament to give the packaging industry too much freedom. The EU Commission obviously has a different view of things than Parliament. We find it disappointing that Parliament is not doing more to protect our planet and not looking at it as a whole – how do they expect to achieve their sustainability goals?”
U.S. and European markets
For over three decades, IFCO’s focus has been on promoting sustainability not just in Europe but globally, including significant progress in the USA and Asia, Pooley observed. There’s a growing recognition of the importance of the circular economy across all regions where operations are conducted, with various organizations championing this cause. This global movement is integral to achieving sustainability objectives.
Regarding the differences in sustainability awareness between European and US markets, the US is rapidly catching up, he said. Although the markets are comparable in size, the US market is characterized by more concentrated and consolidated trade. This environment necessitates pioneers in trade to spearhead innovation. A prime example is Walmart, which has emphasized sustainability in its supply chains for many years. Walmart’s substantial market presence significantly influences this trend. Similar shifts are now evident in other major US retailers, with whom partnerships are being formed. Despite the US market trailing behind Europe in terms of adopting circular economy and sustainability practices, he sees it making rapid and considerable progress.
Digitalization and plant technologies
Digitalization is a top priority, ranking among the top three focuses, particularly in enhancing reusable transport packaging systems with digital labels, Pooley noted. A significant development is establishing a digital pooling system in Colombia, poised to revolutionize inventory tracking. This advancement will grant customers real-time insights into their supply chains, enabling greater efficiency. The plan is to launch this system in 2024 and subsequently replicate it in Europe. This innovation is expected to benefit customers immensely and also increase operational efficiency.
With a global network of 114 service centers, the selection of Darmstadt, Germany, for a European center was strategic due to its convenient location and exceptional logistical advantages. Given the high volume of business, a unique challenge in Europe is the disparity between the regions of fresh produce production, predominantly in the south, and consumption, mainly in the north. Achieving a balance to ensure timely availability of produce is crucial.
Establishing the Dannstadt service center has markedly improved efficiency, yielding a savings rate of 9%. Located in Dannstadt-Schauernheim, southwest of Ludwigshafen, it is one of Europe’s most advanced and technologically sophisticated centers. It boasts the highest quality technologies within the group, making it the most automated and energy-efficient facility currently possible, consuming up to 23% less energy than older facilities. This center sets the benchmark for future service centers, with its energy sourced from renewable options. The commitment is to operate sustainably and with optimal efficiency.
IFCO has also recently established operations in Morocco and the Baltics. “We also want to grow in market areas that are new to us, such as fish, meat, dairy products and bakery products – all areas in which reusable packaging can greatly help protect the environment,” he noted. “Our focus is also on bananas, which have always been transported in cardboard boxes and therefore in disposable packaging.”
Finally, Pooley commented on the recently developed Dora plastic pallet. “We have just brought a new, sustainable plastic pallet onto the market,” he said. “On the one hand, these reusable pallets are very stable and, therefore, have little potential for damage. On the other hand, we are sure that reusable and recyclable plastic pallets can be much more sustainable than wooden pallets. In doing so, we add another link in the logistics chain to the circular economy.”