Company aims to digitize paper-recycling industry
A Minnesota company hopes a new partnership will help make the movement of recycled paper goods more efficient.
Third-party logistics provider C.H. Robinson will work with MerQbiz—a joint venture between German technology group Voith and Boston Consulting Group's Digital Ventures—to allow buyers and sellers of recycled paper products to arrange transportation on the same platform they use to book paper orders.
The companies say it is the first marketplace of its kind in North America.
Recovered paper is a key ingredient for most paper manufacturers. Sourcing that material has traditionally relied on faxes and phone calls.
Robinson's participation will make the calculation of transportation costs easier and more transparent, the company said.
"We know the industry, and we see the inefficiencies in it," said Chris O'Brien, Robinson's chief commercial officer.
In an industry where a large physical volume can be purchased cheaply, the transportation cost of those goods is a key component to a profitable trade.
O'Brien, who has been with Robinson for 25 years, said the paper industry is about 7 percent of the company's business.
"I can't think of a time in our modern history where we haven't been a participant in the paper industry," he said.
Robinson has long helped traditional and e-commerce retailers move the loads of cardboard packaging and other paper goods they accumulate daily to most of the large paper producers and large recyclers throughout the industry.
MerQbiz is headquartered in Manhattan Beach, Calif., and led by John Fox, formerly president of Voith Paper in North America.
In announcing the joint venture last spring, the companies said the North American paper market was plagued by "inconsistent supply and logistic chains, low levels of price transparency and fluctuating product qualities."
Digitizing the supply chain also will help manage economic cycles in the industry, O'Brien said.
For example, in July 2017, China banned the import of 24 types of rubbish, including scrap paper, from foreign countries.
The move brought increased attention to the international supply chain in recycled paper products.
MerQbiz estimates the recovered paper industry is a $30 billion-a-year business.
Robinson's logistics services add the critical pieces that MerQbiz did not have, allowing paper recyclers to both book and track their shipments.
"The integrated logistics solution is a game-changer for the industry," Fox said in a news release. "C.H. Robinson's capabilities are a perfect complement to the MerQbiz digital platform."
O'Brien said Robinson is focused on digitizing traditional supply chain systems.
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