Is the overnight envelope anti-green?
FedEx's environmental director responds to the idea that shipping is "wasteful" in a digital era.
(Fortune) -- At the recent Fortune Brainstorm: Green conference, the subject of the famous FedEx overnight envelope came up. One of my fellow panelists said he was surprised to still see those envelopes, implying that the contents could easily be transmitted electronically, and that somehow this service was environmentally "wasteful."
He made me realize how easy it is for people to make the wrong assumptions or hold on to outdated ones.
Mostly, his comment reminded me of how badly many people want binary answers to what are complex environmental questions. "Is it wasteful or isn't it?" My sound-bite answer is "It's absolutely not wasteful the way we do it." But the question deserves more than a sound-bite answer.
FedEx (FDX, Fortune 500) networks are set up to reduce environmental impacts of our customers' shipments in many ways. We offer customers scores of options that mix and match speed, cost and bulk, depending on their needs. So, if doesn't have to be there overnight, our customers can and do select lower-cost options.
My fellow panelist said people should just fax documents or send them by emailed PDF instead of shipping them overnight. Short answer: they already do and have for years. We anticipated the impact of that technology decades ago; it's a big reason we expanded our portfolio. Our overnight envelopes now amount to less than 10% of our daily pieces shipped (down from 17% ten years ago). The envelopes are a much smaller percentage of the total weight of all shipments through our planes and trucks.
We're even offering our own digital alternative, aimed at large or complex printed products: our FedEx Office Print Online service, from your desktop directly to a FedEx Office (formerly Kinko's) location in the place the print product is needed, skipping the plane trip altogether.
But customers still have compelling reasons something "absolutely, positively has to be there overnight," as our ads said long ago. Contracts requiring personal signatures. Test strips enroute to a laboratory. Highly sensitive materials people don't want digitized. Cherished personal items like photo albums or a family keepsake.
Those overnight envelopes still serve a lot of urgent needs today. And at the end of the day, customers make a price/value assessment when using this service; meaning, if the price of shipping is worth the value of the contents getting to a destination on time and in a reliable manner, they make the right choice.
Most importantly, that overnight envelope isn't riding an empty plane. Just as we created the overnight document delivery business, the shipping technologies FedEx pioneered and keeps improving have helped enable "just-in-time" manufacturing. So, those envelopes are sharing our planes and trucks with what we call "inventory in motion," a wide variety of high-value goods that never see warehouses because they can go directly from the plant to the buyer in our custodial care, saving the energy and emissions associated with warehousing goods.
We even encourage our customers to help us maximize the payload of our planes and trucks through a mechanism called "dimensional weight." If a shipment is light in weight but large in volume, we charge more to ship it than one that's packaged more compactly. (By the way, the overnight envelope is the most compact, and thus environmentally efficient, package in our portfolio.) Overall, the dimensional weight approach hits a sweet spot of sustainability because it increases the number of packages each vehicle or aircraft carries and thus reduces the emissions generated per shipped package.
By slimming down the bulk of their packages, shippers reduce their transportation costs and improve their own environmental performance by consuming fewer packaging materials. We're constantly working to increase the recycled and recyclable content in our packaging as well, including those envelopes.
On top of all that, we've tapped the latest algorithm technology to optimize our delivery routes, increasing system throughput, saving time, and reducing fuel use and emissions. And we're the leader in introducing hybrid and electric vans to further reduce emissions.
That's the non-sound-bite answer, but the message is the same. If it has to be there overnight, FedEx gets it there in an environmentally sound way.