Decarbonizing Fulfillment & Logistics with George Wojciechowski of Manifest

Decarbonizing Commerce

George Wojciechowski is a Cofounder and CEO at Manifest.eco. Prior to launching Manifest.eco, George cofounded ShipBob, a predominant name in the global ecommerce fulfillment space. He joins host Keith Anderson as they discuss a wide range of topics including packaging, transportation, and freight, and powering, lighting, and cooling a massive fulfillment center.

Learn more about George:

• Manifest.eco
• George’s LinkedIn
• George’s email

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Episode resources:

• Decarbonizing Logistics - Alan McKinnon

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TRANSCRIPT BELOW:
Keith Anderson:
Welcome to Decarbonizing Commerce, where we explore what's new, interesting, and actionable at the intersection of climate innovation and commerce. I'm your host, Keith Anderson, and together we'll meet entrepreneurs and innovators reinventing retail, e-commerce, and consumer products through the lenses of low carbon and commercial viability.

Hey everybody, it's Keith and we've got an awesome episode of Decarbonizing Commerce for you today. My guest is George Wojciechowski, co founder and CEO of Manifest, a sustainability first third party logistics company for e-commerce and DTC fulfillment. And before that, co founder of ShipBob, another leading 3PL.

George has more than a decade of experience in fulfillment and logistics, and we cover topics like packaging, transportation, and freight, and powering, lighting, and cooling a massive fulfillment center. I learned a ton, and I know you will also, so let's welcome George Wojciechowski of Manifest.

Keith Anderson: George, welcome to the decarbonizing commerce show. It's awesome to have you on the podcast. Thanks so much for joining us.

George Wojciechowski: Yeah. Pleasure to be here. Happy Friday.

Keith Anderson: Happy Friday. And you know, I, I discovered manifest as part of our work, really on two vectors, we were looking at, what it's going to take to decarbonize fulfillment and logistics, and we're also sort of mapping the ecosystem of technology and service providers that are out there in service of working on, on decarbonizing commerce and, you know, your company and you popped up pretty early in my, research. So I thought maybe just to kick us off, you could tell the audience a little bit about yourself, you know, your career trajectory and, how you ended up deciding to start manifest.

George Wojciechowski: Yeah. Wonderful. Absolutely. So been in this business, almost 10 years now, in logistics and e-commerce fulfillment. Previously, I was co founder of one of the pioneers of the, D2C fulfillment space, a company called ShipBob based in Chicago. And, we really had built a wonderful company and, You know, it was, it was, it was some of the best seven or seven and a half years of my life.

But, you know, I couldn't help but to notice, along that journey, how much waste our industry produces. And it's not any one particular person or companies or generations fault. It's just never been a priority. It's not necessarily, sustainability hasn't necessarily been in the DNA of fulfillment in commerce.

Probably because margins just across the board are, there's always pressure to lower your cost, and still eke out a profit and continue to grow, but I couldn't help but to notice, you know, I've, you know, I, I've started and operationalized like four or five different fulfillment centers, in the past, in cities all around the country, and I have many, many, many memories of the team and I jumping in dumpsters And just jumping up and down on the, on the, on the trash bin just to get it lower so we can put all the waste that is being, you know, the discards from the fulfillment process into the dumpster to get picked up.

And that wasn't unusual. And, you know, as I went further and further in my evolution and my journey in fulfillment, you know, seven, eight years in this business, there were so many technical innovations. And I'm going to be talking about a few of the things that were happening. Apps, tools, ERPs, so much money was being invested in furthering commerce from the technical standpoint, but fulfillment, the way that fulfillment was generally performed and done, hadn't evolved very much at all.

It was still predominantly done the same way that it was done 25 years ago. And I felt, hey, we're in a new century now. We have different priorities. And with all of these different motivations, different standards, different responsibilities, we need to reimagine what 21st century fulfillment looks like and what it should represent, both from a social and environmental standpoint, and thus the journey to create a solution for the 21st century. Began, and that's what Manifest was born from, the inspiration to lead the change towards sustainability and fulfillment, make it more environmentally responsible, sustainable, less wasteful. The amount of waste that's produced in our industry is incredible, and as you and I'm sure your listeners know, nobody's taking our trash anymore, so all of these discarded vessels for shipping and, all the stuff that goes into the fulfillment process.

You know, single use transport from point A to point B and to never be used again. And it's kind of tragic and alarming to me. So, that's, that's the North Star of Manifest. We're trying to lead the change. We are leading the change towards sustainability in e-commerce. And e-commerce is super unique, and we're leading by example.

But it's super unique in that a lot of the businesses that we work with aren't big corporations, not Fortune 5000 companies. These are businesses with a founder or a co-founder and a founder and a small team. So to, you know, lead the change with like a groundswell movement. And, you know, one merchant at a time is a lot, I think has a lot more potential than just, you know, trying to go to the big Fortune 5,000 companies of the world and be like, Hey, here's how you can change everything to be more sustainable.

So I'm really excited by the path that we're on and the progress we've made over the last two years. And the velocity just continues to pick up, day after day.

Keith Anderson: Yeah. I, I can tell you in my experience. You can segment the industry a lot of ways, but one thing I, I noticed as a analyst and observer of the first wave or second wave of e-commerce was, you know, you have new brands, entrepreneurial, really designing a business model and to end with an eye on the future, they don't have any legacy business, or status quo really to maintain.

And so they tend to be at the frontier, leading the way. And then over time is it becomes clearer, even if you don't want it to happen, if you, even if you don't like it. Many of these changes are inevitable. That's when I've seen some of the, you know, larger scale incumbents either adapt and evolve or start to wither.

So I think, you know, part of what I'm always exploring is, all right, who is at the frontier leading by example, you know, learning at the, at the front of the unsorta unpaved trail. So, I think that's super interesting.

George Wojciechowski: Yeah, it's, it's, it is very interesting and I always say that the shift towards sustainability at some point is inevitable, but someone's got to do it and it's not just you and I and other companies trying to build businesses with a sustainable focus, it's the merchants. You know, we, I don't ha, I didn't, you know, we don't build a business by ourselves, our merchants build the business for us, with us, and, you know, and merchants come in all different shapes and sizes and sentiments, but what a lot of merchants are starting to realize is that it's not just the right thing to do to pursue more sustainable practices in your fulfillment, but it's also a competitive advantage.

I am of the thought that it's the new brand loyalty. You know, I had a white paper that came out a couple of quarters ago, and we polled like 2,000 consumers around the country, and 74 percent would buy the product that is more sustainable if you get two similar products, and it costs more, they would still buy the sustainable product.

Why? Because consumers shop with brands that match their values around social, environmental, Issues that match the values of they, what they want, what they have themselves or what they want to have, what they see in themselves or what they hope to have in themselves. And so that's the new brand loyalty. There's so much noise out there. How do you get business? How do you get consumers to continue to shop, at your store, buy your products, and be a cheerleader on socials and say, Hey, this is a brand that I love. And, you know, It's, yeah, it's the new customer loyalty. You see brands come up that have a sustainable focus, like, for example, Liquid Death.

And it's undeniable how loyal people are to a brand like that because they see parts of themselves or what they aspire to be in that brand. And the same thing goes to the base level of fulfillment. Hey, the practices that this company espouses is something that I'm on board with and it makes me feel better about the products I'm buying.

Keith Anderson: So you've hit on a theme twice already that I, I suspect is going to be a recurring theme on the show and I'd love to unpack a little bit, which is, you know, a, the idea that, shoppers are willing or will need to pay more for. The sustainable equivalent of, you know, the more conventional choice and similarly that, you know, in, in a business like fulfillment and logistics or other parts of the value chain, the economics aren't always favorable. I don't know if you're familiar with, a book by a guy named Alan McKinnon called Decarbonizing Logistics. But I mean, it's a textbook, so it's not a, summer read.

George Wojciechowski: probably not.

Keith Anderson: Yeah. But I, I encountered it, as part of, you know, our, our research into the key sources of emissions in fulfillment and logistics, and he's got this fascinating framework that sort of lays out the phases of the likely phases of decarbonizing logistics. Into three distinct eras. And the first he sort of says is the low hanging fruit because it's largely going to pay for itself through the elimination of waste. That is, you know, a lot of the stuff that is, is easiest to do without a lot of additional. Infrastructure development, collaboration between companies or across the industry. It's, you know, reducing the amount of air that you're shipping across the country. It's reducing the amount of material that you're using, which in most cases is pretty correlated with lowering your costs.

So, you know, I think we can discuss it from two angles. First, I'd love to get a deeper sense from you of You know, where you view the low hanging fruit economically and operationally, what's the stuff that, you don't have to worry about your investors or board or others saying, boy, is this really a sensible direction for us?

So why don't we start there and then we'll, we'll continue it.

George Wojciechowski: Yeah. So are you, are you asking from like a basis of like, of, of, of, of, of cost and potentially lower margins because you are making the more sustainable decisions?

Keith Anderson: Or higher margins, you know, I mean, basically have you uncovered elements of a fulfillment and logistics model that is both more sustainable and higher margin or more profitable because you're eliminating costs, you're eliminating waste.

George Wojciechowski: Oh, great question. So you hit some of it on the head, optimizing packaging, low hanging fruit. You're absolutely right. The less materials that you use, yet. You know, shape, continue to safely ship a package, the lower your costs, the more competitive you are because you can lower your, make your prices that you're charging, your, your, your loyal merchants, lower as well.

So it's a win, win, win for everyone and win for the world and win for the environment. So that's something that we've incorporated from day one at Manifest. You know, we need it, you know. I don't view, you can't walk into the street today and say, Hey, I'm going to live my life sustainably, not in 2023, because the world around us just isn't sustainable.

But, you can take actions that it's so I view it as a journey. It's not binary. It's a journey. And so the first thing that we did when we set up shop from day one was eliminate plastics from the fulfillment process, that for us wasn't necessary that, that, you know, didn't increase our costs in any way.

It was more just re-imagining, hey, how can we make, create the same shipments with alternative materials than what the rest of the industry is using. And that was a no-brainer for us too, and we were super surprised how easy it was to, eliminate plastics. Like I, I, I know your viewers are educated on the topic of, you know, Environmental Responsibility.

But I remember reading a statistic early on in my R& D process of kind of, working on Manifest as a, as a concept with my two co founders. And I remember reading that, like since 1955 of all the plastics produced on the Earth, or on the Earth that 93 percent are still in the Earth in some capacity, they're either, you know, on top of a large heap of trash or inside the ground, but they're not going anywhere.

People don't know something as simple as the plastic tape that goes on like 95 percent of the packages that arrive at our door can take up to 500 years to completely biodegrade all the compounds in that tape. Well, why in the world are we using it? You know, knowing that this is going to be the legacy that our generation has left behind.

e-Commerce has created so much democratized prosperity and we have an ability to, to, to, to, you know, to show future generations how you can kind of break down commerce from big retailers and big companies to somebody who has an inspired idea sitting in their apartment in Brooklyn, in Brooklyn, New York, or something like that, and they can now provide an income for themselves and be an entrepreneur and build a team and build a business.

Wonderful things. But then when you look at the, the, the, the byproduct of that from an environmental standpoint, which is even a longer timeline, no, we can do better. And so for us, it was not only exciting to reimagine how we can be more sustainable in the fulfillment process, it felt like a duty, to do so.

Keith Anderson: So you mentioned that, eliminating plastic was easier than you anticipated, what are some of the swaps that you made, or how have you solved that problem?

George Wojciechowski: Yeah, so, um. There's already a lot of products available where, you know, for example, plastic tape, we use paper tape. Paper tape works just as well. It's a little bit more maintenance. You have to wet the tape, but it's completely biodegradable. So much tape is used. That's one of the easy low hanging fruit.

You just have to put your, a little bit more work into it. Void fill, instead of using big ass plastic air pillows. That, will never have a use again. All of, all of the materials that we use in the fulfillment process are biodegradable and or curbside recyclable.

So we spent the first six months, after we decided to pursue building a company, like Manifest, just calling around to suppliers from all around the world. This was still during the lockdown time of COVID and I had calls from South Korea to South Carolina, with different packaging manufacturers. And one of the things that just blew my mind was that it's not necessarily more expensive to produce the more sustainable product for these manufacturers.

It's that everyone is ordering 5 million of the same SKU that they've ordered for the last 10 15 years. And maybe 50, 000 people are ordering like the one SKU that, or the set of SKUs that are sustainable. So it's just more to manufacture it, but it's not necessarily more to produce it. When I came to that conclusion, I was like, boy, this laziness is unacceptable.

So somebody has to go out there and proactively seek these alternatives. And that's what my partners Max, Bob and myself did is we talked to manufacturers. We took, we looked at poly mailers, or except, for example, our poly, the typical poly mailer takes 22 to 25 years to biodegrade. And we looked at a whole bunch of poly mailers, everything from hemp to, to corn, some of the, and, and we would test them on themselves. We would ship something to ourselves and it would come back to our, to our to, to our address. And sometimes they didn't hold up. Sometimes they looked like somebody had shot a machine gun through the poly mailer. It was like, okay, we're not going to be using this. But, through that trial and error process, we found alternatives that were super acceptable to our merchants and to us and to our high standards of like, okay, this is secure packaging.

And, our, for example, so traditional polymaler 22 to 25 years. Unacceptable. Our poly mailers biodegrade within like 432 days or, or some number like that. So a lot less of a tax on the Earth for just being this one time used vessel to transport product from point A to point B.

Keith Anderson: So you mentioned, single use a couple times, are you using, or have you explored reusable packaging?

George Wojciechowski: Yeah. Yeah. Like a lot of, yes, we have, and we have some wonderful partners that we've had ongoing discussions with about using reusables. It's a little bit more complex because not only is the cost to merchants who are always, you know, understandably very cost savvy, but you also have to, influence consumer behavior to cooperate in using this reusable packaging.

So there's some difficulty there, and we haven't necessarily pulled the trigger yet on utilizing that and it has to be a specific type of product too. For example, something like shoes would be really good. For, you know, products, because they're, they're a big box, they take up a lot of space, a lot of materials, but if you can send it in a container that can be sent back, and shoes already have a higher rate of returns than other products, so, you know, instead of having to put it in another box and then drop it off at a, at a, at a returns center, you could just send it back in the same box.

So, we're heading in that direction, but it also, like a lot of things requires scale. You need a lot for to incorporate it at a point where it's economical. You need large amounts of variety and volume to be like, okay, this makes sense. And, you know, we, we, we have a wonderful mix of merchants that we love working with and that we truly look at each merchant like a partner and that where their critical partner and their supply chain, but we don't have the hundreds and thousands or thousands of merchants, perhaps necessary. to make that a scalable solution.

Keith Anderson: Yeah, I I mean within the DTC universe, one thing we've noticed is in categories like personal care and increasingly beauty, household cleaning, for primary packaging, The refill reuse model seems to have potential, particularly when the product itself can be concentrated and the reuse is happening at home without any need to return the package to a 3PL or, or somebody else, to your point, you know, we are seeing more and more of these, solution providers popping up that have reusable mailers and some of those things.

But it seems to me with, you know, admittedly limited research into it at this point, exactly to your point, there's going to need to be huge infrastructure development, even in basic ways, like, you know, more traditional pickup points, accepting the reusable packaging for reverse logistics, because in a lot of these cases that we have looked at, you know, the cost of recovering the reusable packaging is a big part of the challenge.

In addition to the behavioral change that you mentioned, you know, most of these have a payback of anywhere from 5 to 20 uses before you're actually emitting less and making it economically viable. So, you know, we're paying close attention to see how much, is changing and how quickly and in which categories.

George Wojciechowski: Yeah. You know, it's hard because everyone merchants are under so much pressure to continue to grow, continue to make the customer experience of people who receive their packages. One that is pleasant so that they keep re ordering. But at some point, somebody's just got to bite the bullet and be like, hey, we use reusable packaging.

I'm checking out of my shopping cart, I'm clicking that I understand that this is a reusable package, and that I can send it back, or pay whatever it costs for that vessel, an additional $3.50 if I don't, return it. I feel like that's what has to happen, but someone's gotta go first and be like, okay, I'm willing to alienate, some merchants, or some customers by asking the, adding on another $5 to their order if they don't send back this reusable, packaging.

Keith Anderson: Yeah, I, I'm starting to find, there are both those sort of stick approaches to, penalizing the consumer or the merchant or the brand, depending on at what stage of the, the value chain we're targeting. There are also some that are incentivizing it sort of like the reusable, shopping bag model where, you can either you know, save a dime if you bring a reusable bag or some municipalities charge you an extra dime if you don't bring a reusable bag. I don't know yet which model is more effective, but I do see more experimentation.

George Wojciechowski: it's changed my behavior for sure. I remember like three or four years, I was never one of those people that brought their own bags to the grocery store. And, you know. After repeatedly, you know, showing up at the, the counter and being like, it's 39 cents for an additional bag. Okay, fine. All right.

I'm going to take this bag and like save it and bring it with me next time I come to the grocery store because I have four bags and it cost me an extra dollar 30. It's not going to break the bank, but it is annoying. And, yeah, change is uncomfortable. Change is almost always uncomfortable. And, You know, we have to be willing to experience that discomfort to, to, as I did in my own personal, life, with how I, I go grocery shopping, so.

Keith Anderson: So we, we've drilled in on packaging.

What are some of the other major sources of emissions and waste that you've identified in the fulfillment and logistics process?

George Wojciechowski: There's a whole bunch. It's I think logistics just globally is the number four or five, the waste producing carbon producing industry that there is. Some would say that it's daunting that Manifest is on this journey to, to change the industry. For me personally and, and, and my team, it's incredibly exciting, against those odds, you know, and because like, hey, if you succeed, the change that comes from that is how amazing to, to be able to achieve that and be a catalyst for it.

And I, and I, you probably feel similarly, similarly on the journey that you're on. But, transportation, I mean, it's low hanging fruit, you know, moving products from supplier to shipper to, another shipper that takes it to the fulfillment center and then fulfilling it out of the fulfillment center and sending it all over the country.

Each step in that process, if they're using fossil fuel vehicles or boats, which 99. 9999 percent of the time they are, it's producing emissions and, you know, what we've done at Manifest is, is not only work with, regional carriers, but try to find, regional carriers to optimize routes, but to also work and have conversations with the major, carriers, FedEx, UPS, USPS, DHL to, utilize some of their more sustainable services. And, you know, we're, we're, we're very candid and conversational with our merchants about what their options are. Again, priority number one is to run your business successfully, because then we don't have tools for change if you're not in business.

So, and it is more expensive if you're working, expensive, if you're working with a major carriers, and you're like, oh, I want to change, ship this, these products, this more sustainable way. But, optimizing routes, and, you know, trying, and investigating services that use, emissions free delivery trucks or transportation vehicles, is, one way that at Manifest we're pursuing a cleaner supply chain.

Another obvious one for us is energy use. We've all driven through, outside of our cities, if you live in a major city, and then, you know, you drive about ten minutes and then you see a gigantic fulfillment center, whether it's an Amazon fulfillment center or some other company. These buildings are like half a million or a million square feet. The energy use in these buildings, is another, component of emissions in the fulfillment industry. And, you know, I can go into some of the things that we're doing at Manifest, to make our, fulfillment center, more energy efficient and, sustainable. And again, it's a journey. We don't have all the answers on day one, but we're actively pursuing better and newer solutions. But that's another component of, you know, carbon waste in the fulfillment industry.

And, returns and logistics. It's a problem and no one's figured it out yet. But, you know, reverse logistics. Now, you're double, doubling the emissions of that purchase, and, you know, if you don't have, a circular solution where that product is reused or can go back into stock, it's just thrown away, well, shoot. We just went from Austin, Texas to Toronto, Canada and back and that nobody's satisfied and got that product. So it's a lose lose lose for everyone in that scenario. And, and that's another component too, consumer behavior.

You know, Amazon kind of pushed this world of fast shipping, frequent returns, single item orders, and that mentality for consumers has become the standard. And what I've seen in the last couple of years is that people who recognize how wrong that is, not only just on like an environmental level, but on a person level, the amount of stress that that puts on the people in the supply chain, people working in the fulfillment centers, truck drivers, et cetera, is incredible and it's not worth it.

So I'm seeing more and more consumers and merchants that are having candid conversations with their clients and say, hey, our shipping. It's going to be three to five days. It may not be overnight. Here's what it costs for shipping, but here's the sustainable steps that we're taking to ship this product with the least amount of impact possible.

And people are responding to that. It's a small number, but the fact that it's there tells me that there's potential to change the sentiment among consumers, building off that base that currently exists.

Keith Anderson: Yeah, I see the same thing. And I think, again, most of what I've seen so far has been what looks to be experimental versus largely scaled. But, you know, when you were talking about transportation, I tend to think of transportation emissions as a function of distance, you know, how far is the product traveling and what mode of transportation is it?

And that sort of, slower shipping model, to your point can typically not reduce the, the distance traveled. Although depending on, you know, whether you're forward deploying inventory and those sorts of things, sometimes it can help, but it can definitely, you know, enable you to use ground instead of air, which A, you know, is much lower emission, and two, I guess I should say B, is, you know, typically lower cost, and so I've seen a few merchants offering incentives, hey, you know, additionally batching orders, like you said, I mean, during the pandemic, one of the huge points of friction at the household level that I think we've all personally experienced, but I'm seeing it becoming a bigger factor in the industry is, you know, wasteful packaging arriving with single items every day shifted a ton of you know, effort into households that historically was handled in brick and mortar retail outlets.

And I think it opened some eyes to, wow, I don't need everything that I buy online tomorrow or the day after. And when you get people on a subscription or auto replenishment model, you know, not only does it make the revenue more predictable and help you pass a little Incentive onto the consumer, but you can switch from that urgent air, freight to ground-based, save a little money, save a lot of emissions.

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