BY ERIK SANDBERG
The textile and fashion industry is one of the world’s most environmentally impactful industries and therefore needs to evolve to become more sustainable. Circular flows of used textiles are an important part of this evolution, and well-functioning, efficient logistics play a crucial role in this process.
Circular material flows of used textiles typically involve activities such as collection, sorting, storage, transportation, recycling, and sales. These flows are currently organized and managed by a large number of different actors, including retail companies, secondhand stores, and sorting companies. From a Swedish perspective, charitable organizations often play a leading role, but there are also plenty of commercial players involved in these flows. Together, they form a complex national and international ecosystem of actors that is becoming increasingly important as demand for sustainable materials and products rises. Stricter laws regarding producer responsibility for textiles—which are currently being examined in Sweden and the rest of the EU—are also making this ecosystem increasingly important.
The Circular Ecosystem
At a general level, the circular ecosystem can be described in terms of a number of flows that are commonly referred to as ”reuse,” “resell,” “repair,” and “recycle” (see figure). Collected textiles can also serve as raw materials for entirely different types of operations, such as in the manufacture of rags or as filler material (in English, this transition from the original use to another chain is called “cascading”). A last resort to avoid landfilling may be to incinerate the textiles in order to at least recover their energy.
Reuse, Resell, and Repair
When it comes to life-extending practices (typically reuse, resell, and repair), the increasingly widespread and multifaceted secondhand market plays a crucial role. Today in Sweden, there is a wide range of both brick-and-mortar and online stores that are not solely based on a traditional low-price model, but also include more high-profile, niche businesses built on uniqueness and a sustainability image. There are also various types of marketplaces, such as Sellpy, Tradera, and Blocket, for direct sales between consumers. In addition to the secondhand market, many other circular business models have emerged in recent years, including rental services and repair and maintenance services. This expansion of circular business models means that many new customer groups have been attracted, and the volumes to be managed in these flows are rising steadily—albeit from relatively low levels.
A little bit of recycling
The majority of the textiles that are collected are ultimately deemed not to have the potential for life-extending measures and are therefore used for other purposes (such as rags or filler material) or are incinerated or landfilled, either here in Sweden or in other countries. To reduce these proportions, there are currently several techniques for recycling textile fibers; however, the total volumes
in these streams are still small. According to a report from the Ellen MacArthur Foundation (2017), less than 1 percent of collected textiles are currently recycled globally (in the Nordic region, the figure is slightly higher, at about 2 percent, according to Roos et al., 2019). Fiber recycling can, in principle, be carried out in two ways: mechanical and chemical fiber recycling. Mechanical recycling, in which textiles are cut and shredded and then spun into new yarn, is currently the most widespread and viable technique. It is relatively simple but weakens the material, which means that recycled fibers need to be blended with relatively high proportions of newly produced material. Chemical recycling is considered promising because this technology does not damage the fibers in the same way. However, even though technological developments in recent years have made significant progress, chemical recycling is still uncommon on a commercial scale. One exception is the Swedish company Renewcell, whose operations are based on fiber recycling, primarily of cotton.
Classic Logistics Challenges in a New Context
From a logistics perspective, these circular flows present many classic logistics challenges, but in a new context. Typical logistics guiding principles—such as the need for a systems approach, economies of scale and scope, and process orientation—are crucial, just as they are in ”conventional,” linear flows. Otherwise, there is an obvious risk that circular flows will become very costly in the future as the volumes to be handled in them increase, while opportunities for optimal value creation are lost. Similarly, circular flows may be created that are significantly less environmentally sustainable than intended. The challenge facing us as logistics professionals going forward is to contribute our expertise and advocate for the role and importance of logistics in shaping the future of circular business models, strategic partnerships, the use of new technology, and so on. This is one of the overarching insights from the ongoing research project ”Dynamic Capabilities in Retail Logistics Systems,” funded by the Swedish Trade Council, in which researchers from Linköping University and employees at H&M are participating.
Logistics Challenges in Circular Flows
Some examples of logistical challenges in circular flows that are becoming increasingly apparent as volumes rise are as follows:
Customer-Focused Fundraising: As demand for circularity and environmentally sustainable alternatives increases, the demand for recycled raw materials—that is, collected textiles—will rise, making it increasingly important to secure this raw material. There is significant potential here today, as more than half of the textiles consumed each year in Sweden are thrown away with household waste. We have long discussed ”convenience” in customers’ purchasing processes as a strong trend, and now is the time to continue exploring how this convenience can be developed in terms of donation and collection. Just as logistics providers in e-commerce, for example, have been successful in creating customized, flexible delivery options, we now need to be able to create a range of different collection options that meet customers’ preferences. This journey has, of course, already begun, and inspiration can be drawn from companies such as Sellpy, which sends out and offers pickup of bags of used clothing at consumers’ homes. Various mobile collection campaigns, coordination with e-commerce deliveries, and, in general, more customer-friendly collection points are other key elements.
Cost-effective logistics flows: As volumes in circular flows increase, cost-effectiveness is also becoming increasingly important, especially given that there is already fierce competition today, where the costs of newly produced materials and labor associated with linear production are extremely low. And even though increased interest in sustainability may have a positive impact on prices for items such as secondhand clothing, costs for handling, transportation, and storage will continue to play a decisive role in ensuring profitability in circular flows. Local flows need to be coordinated with complex global ecosystems to maximize the value of the collected textiles, and this requires a well-functioning logistics system. Another tough nut to crack is the fact that many circular business models rely on the handling and warehousing of unique products (e.g., pricing or photography for online sales), which hinders standardized processes that contribute to economies of scale and cost-effectiveness.
Use of digital tools and new technology: One way to achieve cost efficiency is to leverage new technology, for example through greater automation, which is particularly important for countries in the Western world. Above all, we see this in the extremely labor-intensive sorting of textiles in the recycling stream. New technology now makes it possible to perform this sorting entirely automatically. There is already a commercial operator in Sweden, Sysav, which uses near-infrared and visual spectroscopy (NIR/VIS) at its facility (SIPTEX) to sort textiles by fiber type and color. The sorting facility makes processing feasible in a high-cost country like Sweden, resulting in significant savings in areas such as transportation costs. The use of AI in sorting is another area that is gaining ground. Here, AI can be used to more accurately identify garments that have the potential to be resold. In this way, more value can be extracted from the collected clothing while minimizing the number of garments that cannot be sold.
Create consistent, predictable material flows: However, an increased level of automation—such as sorting facilities—brings new types of logistical challenges. Large-scale automated sorting shares several similarities with the process industry, where a steady and predictable inflow of materials is crucial to ensuring consistent ”production” and machine utilization rates. Large-scale sorting into different fractions also highlights the need for the design and configuration of the entire downstream supply chain. To avoid incineration or landfilling, the supply in the various fractions must be matched with the demand from different stakeholders. This requires new actors to be integrated into the supply chains as intermediaries, both locally and globally. In general, this means that the demands for adequate inventory management, forecasting, and information sharing throughout the entire supply chain will increase even further.
System Analyses: Another logistics-related challenge—for example, in connection with the introduction of new circular business models—is the ability to conduct a systems analysis to ensure that the costs and environmental impacts associated with transportation and handling do not exceed the benefits. A fundamental question being asked with increasing frequency is whether various circular business models are truly ”good” for the environment. What energy consumption or carbon dioxide emissions are caused by, for example, clothing rentals, which require multiple transport trips and wash cycles? A Finnish study from last year (Levänen et al., 2021) showed that, in the case of jeans, increasing the number of times a pair is worn from 200 to 400 can result in a significantly lower environmental impact. However, if this increase occurs through, for example, rental services—where the jeans need to be distributed among different users—the total environmental impact may outweigh the benefits if the consumer, for instance, uses a car to pick up the garment. In general, it is also important that the circular business model—such as rental—truly replaces linear consumption and does not merely serve as an additional service. In addition to environmental impact, total logistics costs may also need to be analyzed more carefully. In general, many systems analyses today tend to overlook many of the logistics activities that arise in circular material flows, and it is therefore important to incorporate a logistics perspective when conducting this type of analysis.
Finally
Logistics needs to take the lead and manage circular flows just as naturally as it manages linear ones. For this to happen, the division of roles and responsibilities needs to be reviewed in many organizations, and incentives and commitment need to be fostered. More knowledge is also needed on these issues, and at Linköping University, we will therefore launch the FORMAS-funded project ”The Role of Logistics in the Textile Circular Ecosystem” in the spring of 2022, in collaboration with the Swedish School of Textiles in Borås and H&M. Above all, the project will develop new knowledge on how logistical resources and capabilities can be orchestrated within a circular ecosystem, as well as what value—or values—logistics actually helps to create within these ecosystems. In addition to economic value, this includes other types of value, such as image, information, and environmental value. We certainly hope to be able to return to the readers of Supply Chain Effect with results from this project.
Erik Sandberg is an associate professor of Logistics Management at Linköping University.
