05/30/2007

U.S. Postal Service Requires 'Green' Package Products

By Angela Greiling Keane
Bloomberg.com

May 30 (Bloomberg) -- The U.S. Postal Service is requiring vendors to use environmentally friendly materials to create envelopes and packages that carry 500 million Priority and Express mail shipments annually.

Packaging-products suppliers including Bell Inc. must use materials that can be recycled and won't harm the environment, Postmaster General John Potter said in an interview. The changes apply to 10 direct suppliers and 200 makers of products such as glue, ink and paper.

``We wanted to get to the point where everything was recyclable, where it wasn't going to cause any damage to the ozone layer,'' Potter said. He discussed the changes at a Washington press conference today.

In 2006, the Postal Service tallied more than $6 billion in revenue from Priority and Express mail, spokeswoman Joanne Veto said. They are the premium shipments that compete with private delivery companies FedEx Corp. and United Parcel Service Inc.

The Postal Service, which builds the cost of Express and Priority mail packaging into its shipping price, spent about $114 million on the packages themselves last year, Veto said.

As the Postal Service developed the standards over the past two years, packaging suppliers have had to work with their own vendors to identify each component used in packaging materials and gauge their impact on the environment.

Bell, the world's largest supplier of paperboard envelopes, counts the Postal Service as its biggest customer. The closely held Sioux Falls, South Dakota, company had to change some inks and adhesives to meet the new requirement.

Ink and Chlorine

Many ink pigments contain chlorine, said Steve Bolton, the manager of business development for McDonough Braungart Design Chemistry LLC, a Charlottesville, Virginia-based consulting firm that worked with the Postal Service to develop the standards.

``Those pigments don't go away,'' Bolton said in an interview. ``They're washed off when they're recycled, yes, but there's some possibility that they can carry on.''

FedEx, of Memphis, Tennessee, has worked to improve the environmental friendliness of its packaging over the past decade, spokesman Ryan Furby said in a written statement. He said their packages use only non-toxic inks, varnishes and adhesives, and the FedEx envelope is made of 100 percent recycled material and at least 35 percent post-consumer content.

Other postal packaging suppliers include R.R. Donnelley & Sons Co., the largest North American printing company; Weyerhaeuser Co., the world's largest lumber producer; and Temple-Inland Inc., a forest products manufacturer.

Suppliers' Suppliers

``This starts with the end user and how they use a package and goes all the way back to the root components at the molecular level of the supply chain,'' Ben Graham, a Bell vice president, said in an interview. ``Not just our suppliers but the suppliers of our suppliers.''

Graham declined to discuss the costs of the changes.

``There were obvious costs to the manufacturing process and to the supply chain,'' he said, without elaborating.

Potter said the project is cost-neutral to the Postal Service, which didn't lose any vendors because of the requirements.

``Given our scale and the fact that we were buying 500 million packages, we were able to get the attention of suppliers,'' Potter said at the press conference. ``Hopefully, it will be good for their business as well.''

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net
Last Updated: May 30, 2007 15:50 EDT