Closing the Loop: How Logistics Can Drive Sustainability

The transition from a linear to a circular economy is essential to preserve natural resources, reduce waste, and combat climate change, while also aligning with environmental responsibilities and EU regulations. Logistics plays a pivotal role in facilitating returns, enabling repairs, and supporting recycling efforts. A recent DB Schenker study in Poland sheds light on the current state of circular economy adoption, uncovering both challenges and opportunities.

The European Union’s circular economy action plan aims to reduce pressure on natural resources and focuses on achieving a significant milestone - doubling its circular material use rate (CMUR) in the coming decade, with a target of 22.4% by 2030. The CMUR measures the circularity of materials in the economy and refers to the share of the total amount of material used in the economy that is accounted for by recycled waste.

This would mark an essential step forward in reducing waste and promoting sustainability in the European market. However, despite these ambitious goals, notable differences exist among EU member states, with some nations experiencing a decline in their CMUR, such as Poland. In response, we at DB Schenker conducted a study to understand the reasons behind this phenomenon. The study: “Closed loop – logistics for the circular economy from the perspective of Polish companies” explored how well Polish companies understand the circular economy, their awareness of reverse logistics as an essential aspect of the model, and whether they plan investments in this sector. Our survey was completed by representatives of over a hundred medium and large companies in Poland, from various sectors such as industrial processing, automotive, construction, FMCG, healthcare, and others. The findings provide valuable insights into both local and global challenges in adopting circular economy principles.

The Necessity of the Circular Economy

The traditional linear economic model—“buy-use-dispose”—has led to unprecedented consumption of raw materials and severe environmental damage, including resource depletion, water and air pollution, and ecosystem degradation. Transitioning to a circular economy is essential to mitigate these issues. This model emphasizes extending the lifecycle of products through reuse, repair, and recycling, thereby reducing resource consumption, waste, and emissions.

Under circular principles, reuse is prioritized over recycling and recovery. Recycling, while valuable, is energy-intensive and cannot be conducted indefinitely. Recovery (e.g., energy recovery) typically addresses only a fraction of the original material. New regulations encourage “eco-design”—designing products with minimal environmental impact and maximum longevity. Products are increasingly expected to remain useful and sustainable for extended periods.

To achieve these goals, collaboration across industries and value chains is crucial. The circular economy cannot succeed without collective efforts from manufacturers, logistics providers, policymakers, and consumers. Regulatory changes are affecting all sectors including plastics, textiles, electronics and construction, among others, and companies must align their strategies with these changes, leveraging innovations and adapting supply chains to support the circular model. It would seem that companies understand this and are taking action in this direction, but are they really?

The Current State of Awareness and Adoption

Despite the growing emphasis on circular practices, many businesses remain in the early stages of adoption. DB Schenker’s study, conducted in May and June 2024, highlights several critical trends related to the circular economy in Poland:

• Knowledge and Awareness: While 70% of respondents are familiar with the concept of the circular economy, only 38% feel their knowledge is sufficient. Many lack clarity on which specific actions align with circular principles.
• Unrecognized Circular Practices: A surprising 64% of respondents are unaware that their companies are already implementing circular solutions, even though they are actively doing so. This points to a significant communication gap within organizations.
• Investment Plans: Encouragingly, 56% of companies plan to invest in circular economy initiatives within the next five years. However, knowledge gaps and cost concerns may slow the pace of these investments.
• Barriers to Implementation: High costs (30%) and the lack of market standards (29%) are identified as the biggest obstacles to adopting circular economy models on a larger scale.
• Role of Logistics: Only 44% of respondents understand how logistics providers can support circular initiatives, and 46% have not yet entrusted logistics companies with any circular-related tasks.

These findings underscore the need for greater education and clearer communication about the benefits and feasibility of circular solutions. Moreover, businesses should build stronger partnerships with logistics providers to fully realize the potential of circular practices.

Polish Companies and Circular Economy Practices

Despite the challenges, Polish companies increasingly recognize the benefits of adopting circular economy practices. According to our study, 51% of respondents believe that circular solutions enhance market competitiveness. These solutions can lead to the production of longer-lasting goods and significant reductions in waste. Refurbishing and reselling products also create additional revenue streams by reaching customers who may not be able to afford new products, thereby expanding market access and fostering brand loyalty.

Nevertheless, barriers to broader adoption persist. Beyond high costs and the lack of market standards, companies cite insufficient technology as another challenge (29%). Planned investments over the next five years include waste segregation systems and reuse initiatives, but fewer companies are focusing on more advanced circular practices, such as resale infrastructure (16%) or digitization of return management (19%).

The respondents' answers also confirm that companies operating in EU markets are more advanced in their adoption of circular economy principles due to stricter regulations and higher consumer awareness. This underscores the importance of implementing legal regulations and establishing unified market standards and increasing awareness to bridge the gaps between countries with varying levels of progress.

The Pivotal Role of Logistics in the Circular Economy

And what role does logistics play in the circular economy? Logistics providers are essential in enabling circular practices, particularly through reverse logistics. This includes managing product returns, repairs, and recycling, ensuring that materials and goods are reintroduced into the supply chain rather than discarded.

Successful projects have proven that, with the right expertise and resources, these activities deliver measurable benefits to business. For instance, results based on DB Schenker experience in operating contract logistics facilities dedicated to circular economy operations, where we provide services such as after-sales support, reverse logistics, repair, and component recovery, indicate that:

• 20% of returned items are repaired instead of being sent back to the manufacturer,
• international transport of returns can be reduced by 20%, thereby lowering carbon emissions and distribution costs,
• return and disposal operations are conducted in a single location, ensuring better control over the process.

As companies increasingly seek ways to align with circular economy principles, logistics providers will continue to play a key role in delivering the necessary infrastructure and expertise. Their ability to manage reverse logistics, in particular, can help businesses overcome operational challenges and implement more sustainable practices.

Logistics also facilitates the global exchange of knowledge and best practices, enabling less advanced markets to learn from early adopters. This collaboration can help standardize processes, making circular practices more accessible and cost-effective across borders.

Developing services that support the entire lifecycle of products appears to be crucial not only for logistics providers but also for businesses.

A Path Forward

The shift to a circular economy represents both a challenge and an opportunity for businesses worldwide. While awareness of circular principles is growing, significant gaps remain in knowledge, investment, and implementation. The findings from our study highlight the need for greater collaboration, education, and innovation to overcome barriers and accelerate progress.

Logistics providers have a vital role to play in this transformation. By offering expertise in reverse logistics and circular supply chain management, they can help businesses reduce costs, improve efficiency, and achieve sustainability goals. These partnerships are essential and beneficial to adopt a circular model.

We encourage you to explore our full report, which is based not only on quantitative research but also enriched by in-depth interviews with selected DB Schenker clients from the FMCG, IT, and automotive sectors. Additionally, experts from organizations such as the UN Global Compact Network Poland, the Warsaw School of Economics, and the Reverse Logistics Association contributed valuable insights to the study. The document is available here:
Closed loop economy | DB Schenker