The Government of Canada launched the National Cyber Security Strategy Consultation this summer, requesting feedback to the changing digital landscape and the exposure to cyber threats and cybercrime.
An eight-week public consultation ran until August 19, 2022, with contribution from a broad range of Canadians.
Canada’s National Cyber Security Strategy was initially launched in 2018. Since that time new technologies and international events have impacted how we use the internet, and increased potential risks. The COVID-19 pandemic and the significant increase in ransomware are just two examples of events that have changed considerations around cyber security since the Strategy’s release.
Input received will be compiled and analyzed to identify key themes, ideas and suggestions to help inform and guide the Renewal of the National Cyber Security Strategy. Results may be used to inform policy and may be shared within the Government of Canada. Public Safety Canada will retain completed online survey and email submissions in order to develop a summary of findings and to develop a high-level public report.
Goal 1: Secure and Resilient Canadian Systems:
The threats we face in cyberspace are complex and rapidly evolving. Governments, businesses, organizations, and Canadians are vulnerable. With more of our economy and essential services moving online every year, the stakes could not be higher.
In terms of concerns related to cyber security, cybercrime, etc., and how the Government of Canada could help to better protect individuals and organizations, CIFFA indicated that :
“ Our members are struggling with assessing the risks that they face and the level of investment those risks justify in Cybersecurity and/or Cyber insurance premiums. It would be helpful to have a risk calculator developed by the Government of Canada that would allow them to establish appropriate budgets.
Our members are also concerned about risks (unintentional or otherwise) from with their firms. Clear guidance on what they can and cannot do with respect to monitoring the use of company IT would be helpful. This is especially true in Work from Home situations.”
Goal 2: An Innovative and Adaptive Cyber Ecosystem
In terms of Cyber Security Awareness, and initiatives needed to help increase cyber security awareness for all, CIFFA indicated that:
“We would like to see the Government of Canada advertising the resources that have been made available (www.getcybersafe.gc.ca). The advertising should be broadcast across as many channels as possible and specifically address securing Work from Home environments.
We would like the Government of Canada to partner with Associations like ours to get the message out to Members. The Government should provide a quarterly bulletin that we can incorporate into our regular Member communications. We would like access to more up-to-date information. In many cases the information provided by the Government of Canada is 10 years old.”
Agile and Adaptive Cyber Security Capabilities
What steps should be taken to secure networks, emerging technologies, and to better protect Intellectual Property and consumer products (like Internet-of-Things and apps)?
CIFFA responded that it would like to see the Government of Canada certify any device that attaches to the network as meeting Cybersecurity standards.
“We would also like to see the introduction of penalties for firms that deploy apps and/or hardware that collect and disseminate information for which they do not have appropriate permission. “We would like to see clearer guidelines for reporting Cybersecurity incidents. We would also like to see the process clarified and simplified. When do members contact police, privacy commissioner, etc.?”
Cyber Skills and Talent Pipeline
What can be done to increase Canada’s cyber security workforce capacity and create job-ready workers? (For example, is there a mismatch between the in-demand skills and the skills of post-secondary graduates, is there a misalignment between job descriptions and the experience of candidates, is there a need for standardized curricula and outcomes, access to work-integrated learning opportunities, and short-cycle training and upskilling for workers and graduates, etc.?)
CIFFA noted that “we believe that there are unique cybersecurity concerns in the supply chain for which skills are not being developed. We recommend, in cooperation with the Government of Canada, the development of a short cycle training program that is made available to our members to ensure their staff have the appropriate skills for dealing with these unique challenges.”
Goal 3: Effective Leadership, Governance and Collaboration
What is needed to strengthen collaboration and engagement on common interests between the provinces, territories, Indigenous communities and Municipal governments, regulators, private sector, academia, not-for profits, labour organizations and the Government of Canada?
CIFFA would like to see cooperation between the Government of Canada and providers of cybersecurity insurance so that a common understanding of the risks and ways to mitigate the risks in the most cost effective manner can be developed and shared with our members.
What can the Government of Canada do to help shape the international cyber security environment in Canada’s favour and advance Canada’s international cybersecurity interests?
Finally, CIFFA indicated it would like to see the Government’s support and/or participation in the global initiatives to enhance cybersecurity in the supply chain. This includes topics as diverse as smart sensors (IOT) and Blockchain.
A CIFFA Member to Member Webinar on Cybersecurity – “How to Protect Your Business, Tomorrow”, was held June 28, 2022, offered as follow-up to the 10 Best Cybersecurity Practices paper created by CIFFA’s Technology Committee.
A panel of seasoned professionals provided expert advice and best practices on how to protect your business – both before and after a cyber attack.
Many cyber attacks happen because hackers spot a security vulnerability and exploit it. They can do this by: brute-forcing the password, eavesdropping on communications, and extracting personal information through phishing attacks, and through many other means.
Moderated by Drew Simons – Principal, Roxville Technology Inc., webinar panelists included John Berry – SVP of Information Technology, OEC Group, Shawn Davidson – President, Trapp Technology, Ashish Mathur – Global CIO, ECU Worldwide, and Aadhar (Ady) Sharma – Vice President, AON.
According to Trapp Technology, today’s most common threats and attacks include: social engineering (human error), phishing, (a type of social engineering where an attacker sends a fraudulent message designed to trick a person into revealing sensitive information to the attacker or to deploy malicious software on the victim’s infrastructure like ransomware), vishing, (just one form of phishing, which is any type of message – such as an email, text, phone call or direct-chat message – that appears to be from a trusted source, but isn’t-(the goal is to steal someone’s identity or money), and smishing, (a phishing cybersecurity attack carried out over mobile text messaging, also known as SMS phishing), ransomware (Crypto Locker), distributed denial of service (DDoS), (a cybercrime in which the attacker floods a server with internet traffic to prevent users from accessing connected online services and sites), brute force attacks, (uses trial-and-error to guess login info, encryption keys, or find a hidden web page), and man-in-the-middle, a type of cyber attack in which the attacker secretly intercepts and relays messages between two parties who believe they are communicating directly with each other. The attack is a type of eavesdropping in which the attacker intercepts and then controls the entire conversation.
Attacks like drive by downloads exist when a hacker creates a vector for malware delivery — online message, ads, legitimate program downloads. You interact with the vector for example by clicking a deceptive link.
The most common and the most prominent ways that ransomware enters an organization are the following: e-mail link, 31%, e-mail attachment, 28%, and via website or web app, 24%, (with unknown at 9%, social media at 4%, USB stick 3%, and business application 1%.)
As guidance, unsolicited emails should not be trusted, nor should funds be sent to people who request them by email, especially not before checking with leadership. Spam should always be filtered, and an antivirus, firewall and detection programs installed and kept up to date.
Never click on unknown links in email messages.
Also, beware of email attachments. If you get one from what looks like a friend, contact them independently to ensure that they actually sent it.
Slow down. Hackers want you to act first and think later. Never let someone’s urgency prohibit your careful review of the situation. Delete any request for information that seems suspicious. Do not reply or forward the message.
Any email that randomly asks you to change your password or payment information could be a scam (phishing) and must be verified by other means of communication. Phishing is one of the most successful forms of social engineering attacks used today.
The government or any financial institution will never contact you using email to request private information.
Cyber insurance: what’s its role?
According to AON, the role of cyber insurance is to help protect an organization with pre-breach assessments, access to pre-vetted vendors, and cyber security information. Assistance can be provided via forensic investigators, legal services, credit monitoring, call center services, crisis management and public relations.
Proper insurance enables a business to return to “operational”, accounts for the loss of revenue, income and turnover, and accounts for costs incurred to recreate or restore data and information.
Insurance can also mitigate legal costs and damages from claims alleging privacy breach or network security failure.
Cyber insurance can offer coverage for items such as breach event expenses, for example reimbursement coverage for the insured’s costs to respond to a data privacy or security incident.
Policy triggers vary but are typically based on discovery of an event, or a statutory obligation to notify consumers of an event.
Insurance can also cover digital asset restoration, cyber extortion, network business interruption, system failure, dependent business interruption, dependent system failure, privacy and network security liability, privacy regulatory fines and penalties, media liability, and PCI fines and penalties.
The Fall 2022 issue of the Forwarder is largely dedicated to the topic of Technology and the trends and issues forwarders and other supply chain stakeholders face in adopting it, adapting to it, and harnessing it for success and transparency.
Evolving technology is pushing the boundaries and changing how the world does business. While some of the effects can disrupt the logistics industry, over the long run they can also help leverage the use of automation, workflow optimization, digitization and artificial intelligence. In the context of the supply chain, improved technology has also increased productivity, minimized costs and errors, enhanced customer experienced value, and facilitated data-sharing to multiple sources in real time. These advancements should be explored and analyzed in detail by the freight forwarding community, ensuring that they are well informed and prepared to meet the future demand. (Download Full Magazine)
TORONTO, December 5,2022 — CIFFA, the Canadian International Freight Forwarders Association, has appointed Julia Kuzeljevich to the position of Director, Policy and Regulatory Affairs.
Formerly in the role of Director, Policy and Communications, Julia will now assume more responsibility for CIFFA’s government relations files, at all levels of government and working with CIFFA’s lobbyist in Ottawa.
The role reflects CIFFA’s increasingly active Advocacy agenda on multiple fronts and reports to the Executive Director.
Commenting on the appointment, CIFFA Executive Director Bruce Rodgers said “CIFFA is taking a more proactive approach in addressing our membership needs with legislative officials. This new appointment better reflects the direction and requirements of our Association.”
The role is effective immediately.
The Canadian International Freight Forwarders Association (CIFFA) represents some 300 regular member firms including freight forwarding, freight brokerage and drayage companies. CIFFA member companies employ tens of thousands of highly skilled international trade and transportation specialists. As a vital component of Canada’s global supply chain, member firms of the Canadian International Freight Forwarders Association (CIFFA) facilitate the movement of goods around the world. We provide a vital link in Canada’s global supply chains, enhancing export capabilities and assisting in the delivery of competitive solutions to Canada’s importing and exporting communities.
On October 5, 2022, CIFFA’s Executive Director Bruce Rodgers and Director, Policy and Communications Julia Kuzeljevich presented to the House of Commons Standing Committee regarding Anticipated Labour Shortages in the Transportation sector.
CIFFA was one of three witness groups. Also participating were:
Each group presented an opening statement which was followed by a government Q&A period.
CIFFA thanks its Board of Directors for providing input and content to be addressed.
The questions primarily related to driver shortages and underground economy through Drivers Inc.
We were able to table the following points: supply chain challenges, off-shoring activities, the National Occupation Classification system and the need for a comprehensive National Trade Corridors strategy.
The following text is CIFFA’s written submission as sent to the Clerk:
Remarks of the Canadian International Freight Forwarders Association To The House Standing Committee on Transportation, Infrastructure and Communities
October 5, 2022
Thank you Mr. Chairman for inviting Bruce and me to speak on this critical issue.
Monsieur le président et mesdames et messieurs les membres du Comité, au nom de l’ATIC, l’Association des transitaires internationaux canadiens, nous vous remercions de nous donner cette occasion aujourd’hui de nous adresser à vous.
Before we start, we’d like to compliment the committee for your diligence in chasing these issues, which are so serious and so complex. It means a lot to all of us in the industry that you are looking for any solutions government might provide.
The Canadian International Freight Forwarders Association (CIFFA) represents some 300 regular member firms from the largest of global multi-national freight forwarding firms to small and medium sized Canadian companies. CIFFA member companies employ tens of thousands of highly skilled international trade and transportation specialists.
Our members are the front line of Canada’s supply chain, managing the majority of freight shipments. But it’s important to note that we also represent Drayage operators – these are the truckers serving the ports and container terminals where you have seen such congestion in recent years, and the Freight Brokers – who manage the movement of cross border trade.
The human resource problems in the supply chain are critical and are NOT getting better. Many of the problems are tied up with the frustrations of the supply chain itself.
People used to make their money on speed and volume. Today that’s impossible in many areas.
We have a short, less than 2-minute video, which one of our members recorded that illustrates a small but contributing part of the problem. A copy has been sent to the clerk.
In the video you would see 65 trucks, lined up waiting to get into the one of the Rail yards in Vaughan, Ontario. This is the equivalent length of approximately 40 football fields. These trucks are trying to return empty containers which are required to facilitate export trade.
It’s important to understand that these drivers make their money by moving containers between the rail yards and importers and exporters. As they sit idle they are losing money. It’s hard to recruit new drivers when everyone can see how hazardous a business it’s become. Rising fuel and insurance costs only add to the problem.
The CIFFA member who recorded this told us he had 8 drivers in this line, and none got into the yard that day. Their drivers waited in excess of 5 hours, only to have the gates closed due to Terminal congestion.
By the way, this congestion in Vaughan is actually connected to Canada’s West Coast. Government put significant pressure on the rail providers, terminals operators and the port of Vancouver to clear the backlog and ships at anchorage. The rationale was to facilitate the export of grain. We all understand that priority, but the improved flow in Vancouver doesn’t indicate we solved the problems; we just moved them further inland, to Toronto and Montreal.
So, unfortunately, our first “suggestion” for addressing workforce shortages is to fix the terrible problems affecting the supply chain.
As Parliamentarians you’ll make your own decisions about how interventionist the government should be. Our laissez-faire, market driven system has worked well for decades, but the transport sector is having trouble resetting itself.
The chronic uncertainties that are frustrating consumers are also squeezing the workers and the problem is not getting better.
And in the video there were no porta-potties along that line. A problem for all drivers, but especially for women.
Thanks to the committee again for your attention to this issue and we welcome your questions.
CIFFA is pleased to have partnered with National Post and mediaplanet on a Supply Chain Resilience campaign.
Recent events have highlighted weaknesses in the supply chain. CIFFA acts as the voice of freight forwarders, freight brokers, and drayage operators.
Canada’s supply chain — deemed fragile at best before COVID-19 — has become even more so in the past two years. “COVID-19 was the catalyst to really expedite all these challenges,” says Bruce Rodgers, Executive Director of the Canadian International Freight Forwarders Association (CIFFA). “Under the current situation, a disruption at any of the points along the chain means significant breakdowns and failures everywhere, where one day of disruption will take roughly a week of recovery.”
Weather issues, labour disputes, rail blockades, and changes in consumer purchasing habits are some of the factors that have compromised the stability of our supply chains. Another is the irregular and unpredictable steamship schedules, making it hard for importers to gauge when products arrive. “This causes them to order in advance to ensure well-stocked shelves. Then when the ships do arrive, it creates a surge of volumes which causes an overflow in the warehouses, which in turn creates further congestion down the line at the rail yards and ports,” says Rodgers.
Advancing the interests of freight forwarding community
The Canadian International Freight Forwarders Association — established in 1948 — works to advance the needs and interests of the supply chain community across three pillars — membership, education, and advocacy.
There are two membership categories — regular members and associate members. The regular membership category, which comprises freight forwarders, was recently extended to include drayage operators who move shipping containers from ports and terminals and Third-Party Logistics (3PL) load brokers, to ensure a stronger voice and broader reach. Associate members are any companies or entities connected in some way to freight forwarding and movement of goods, such as insurance companies, legal firms, IT-related organizations, port authorities, rail providers, carriers, trucking companies, and customs brokers.
CIFFA’s education pillar has formed the cornerstone of the Association since its inception. “We have a very strong reputation under the CIFFA brand for quality educational products for the logistics industry and a consistency of delivery,” says Julia Kuzeljevich, Director of Policy and Communications at CIFFA. The Association’s programs have evolved and expanded continuously year-over-year and were recently updated with on-demand and virtual offerings to support remote learning. In addition to learning the latest industry news delivered through CIFFA’s eBulletin and access to The Forwarder print magazine, members benefit from special pricing on events, education, and training initiatives.
Through the advocacy pillar, CIFFA is raising awareness of the issues and lobbying for improvement in the industry. “We have developed strong relationships with our external stakeholders such as the ports, terminals, rail providers, and partner organizations, and we regularly participate in and present at industry conferences and committees,” says Kuzeljevich.
“…cargo doesn’t complain, so we’re the voice of cargo and will continue to raise awareness of Canada’s supply chain challenges and strive to improve for the benefit of industry.”
A holistic approach needed to solve problems
CIFFA has also been expanding its outreach with the federal government. “We’re trying to make them aware of the bigger picture because looking at the problems in isolation just creates further problems down the line. You need to take a holistic view of everything that’s being affected through the supply chain challenges to come up with a solution,” adds Rodgers.
And while the supply chain challenges are global in nature, Rodgers explains that we can’t solve them as a country if we don’t look internally. “As I like to say, cargo doesn’t complain, so we’re the voice of cargo and will continue to raise awareness of Canada’s supply chain challenges and strive to improve for the benefit of industry,” says Rodgers.
Author: Anne Papmehl, ca.editorial@mediaplanet.com (View Article)
NOTE: The following applies only to provincially-regulated employers in Ontario. It does not apply to federally-regulated employers in Ontario.
In 2022, the Government of Ontario passed Bill 88, Working for Workers Act, 2022. Amongst other things, the Bill amended the Employment Standards Act to require provincially-regulated employers who have 25 or more employees in Ontario as of January 1 in any year are to have a written policy with respect to electronic monitoring in place by March 1 of that year. As a transitional provision, provincially-regulated employers who have 25 or more employees in Ontario on January 1, 2022, will have until October 11, 2022, to have the policy in place.
The policy must include all forms of employee monitoring that is done electronically by the employer.
Employers are to provide a copy of the written policy to all employees within 30 days of preparing the policy or, if an existing written policy is changed, within 30 days of the changes being made to all employees. The employer must also provide a copy of the written policy to any new employees within 30 calendar days of the date of hire.
As a CIFFA member, you have FREE access to a Gallagher HR Online account. Login today to access the Electronic Monitoring policy template.
If you are having difficulties logging into your account please contact the Humaniqa Help Desk by email at info@humaniqa.com or phone at 1-855-237-1066.
The following article was contributed by CIFFA member Humaniqa.com
TORONTO, September 16, 2022.
For over twenty years, FIATA and the TT Club have been organizing the annual Young Logistics Professionals Award (YLP Award), formerly the Young International Freight Forwarder of the Year Award (YIFFYA). This competition provides valuable opportunities to young professionals in the freight forwarding and logistics fields.
In January 2022, CIFFA selected Karina Daniela Pérez Pérez as the Canadian winner of the YLP Award. She subsequently entered the regional round of the YLP Award, was announced as the Americas regional winner in July 2022, and became one of four contestants to compete for the global YLP Award at the FIATA World Congress in Busan, Republic of Korea in September 2022.
After defending her dissertations and, following a review process by FIATA and the TT Club, Karina was announced the global winner of the YLP Award on September 16, 2022.
Karina’s dissertations detail the transportation of two key products for the Canadian economy – an importation of over-dimensional generator engines from Germany to Northern Ontario for a mine expansion project, and an exportation of dangerous goods from Canada to Peru, both focusing on the environmental aspect of the move.
The prize to be awarded to the winner principally consists of practical and academic training, including a week based at one of the TT Club’s regional centres in London, Hong Kong or New Jersey plus a week in the TT Club’s Head Office in London. Additionally, a one-year subscription to the International Transport Journal (ITJ) is provided to all four regional winners.
Karina started her post-secondary education in Mexico, where she received a scholarship to study a semester abroad at Bishop’s University in Quebec, Canada. She obtained her Bachelor’s Degree in Biotechnology Engineering from the Instituto Politecnico Nacional. She continued her education in Canada and graduated with High Honours from Seneca College’s International Transportation and Customs Program. Karina was one of only a few students selected for the co-op program during which she gained experience handling import and export shipments via truck to and from Canada, USA and Mexico and went on a business trip to Queretaro, Mexico while working for First Frontier Logistics Inc. Karina has also completed the Authorized Cargo Representative and Customs Automation Certificate Descartes MSR Customs course, as well as the CIFFA International Freight Forwarding Courses and received the FIATA Diploma. Her passion for the logistics industry began in her hometown of Zamora, Michoacan, Mexico, whose main economic activity is the exportation of fresh and frozen fruits. She currently works as an Inside Sales Representative at DSV Global Transport and Logistics. Karina has also been part of the Air Import and Export Department, where she has won the data quality challenge award of excellence. She has volunteered with the Trade Commission of Mexico and the Daily Bread Food Bank.
For more information on CIFFA’s Young Logistics Professionals Award, visit https://www.ciffa.com/awards-and-scholarships/
BILL S-211, an Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff, had a first reading November 24, 2021 in Canada’s Senate.
The Fighting Against Forced Labour and Child Labour in Supply Chains Act imposes an obligation on certain government institutions and private-sector entities to report on the measures taken to prevent and reduce the risk that forced labour or child labour is used by them or in their supply chains.
The Act provides for an inspection regime applicable to entities and gives the Minister the power to require an entity to provide certain information. This enactment also amends the Customs Tariff to allow for a prohibition on the importation of goods manufactured or produced, in whole or in part, by forced labour or child labour as those terms are defined in the Fighting Against Forced Labour and Child Labour in Supply Chains Act.
The Act states the following:
Whereas forced labour and child labour are forms of modern slavery; whereas Canada, as a party to the eight fundamental conventions of the International Labour Organization on fundamental labour rights — including the Forced Labour Convention, 1930, adopted in Geneva on June 28, 1930; the Abolition of Forced Labour Convention, 1957, adopted in Geneva on June 25, 1957; and the Worst Forms of Child Labour Convention, 1999, adopted at Geneva on June 17, 1999 — is determined to contribute to the fight against modern slavery; child labour means labour or services provided or offered to be provided by persons under the age of 18 years and that:
(a) are provided or offered to be provided in Canada under circumstances that are contrary to the laws applicable in Canada;
(b) are provided or offered to be provided under circumstances that are mentally, physically, socially or morally dangerous to them;
(c) interfere with their schooling by depriving them of the opportunity to attend school, obliging them to leave school prematurely or requiring them to attempt to combine school attendance with excessively long and heavy work; or
(d) constitute the worst forms of child labour as defined in article 3 of the Worst Forms of Child Labour Convention, 1999, adopted at Geneva on June 17, 1999
The definition of child labour was revised because the original definition was over-inclusive and difficult to manage (there are no uniform labour laws in Canada, and it may be inappropriate to apply Canadian norms abroad). The old definition was also under-inclusive because it only referred to the worst forms of child labour. For this reason, the new version of the Bill will limit the application of Canadian laws to Canada but will add new subsections (b) and (c), inspired by the ILO definition of child labour.
The purpose of this Act is to implement Canada’s international commitment to contribute to the fight against forced labour and child labour through the imposition of reporting obligations on:
(a) government institutions producing, purchasing or distributing goods in Canada or elsewhere; and
(b) entities producing goods in Canada or elsewhere or in importing goods produced outside Canada
The Bill has passed first and second readings, which means that it is now going to committee stage before the Senate Standing Committee on Human Rights.
Like earlier versions of this Bill, the goal is to improve transparency in supply chains. If adopted, businesses subject to the Act would be required to file and publish annual reports on the steps they are taking to prevent and reduce the risk that forced or child labour is being used in their supply chain.
According to the Canadian Chamber of Commerce, in an analysis of the Bill, the revised Bill provides greater certainty and clarity for business in several respects.
Some elements of these improvements are the following:
Other elements of note include:
A February 2022 whitepaper from DHL discussed the topic of circularity, and its role in fashion and consumer electronics.
At its heart, circularity describes a departure from the traditional produce-sell-use-waste paradigm toward more sustainability.
A circular economy could be thought of as a design for an ecosystem that builds on sustainability, visibility, and multidirectional flows. To move away from the traditional paradigm, production volumes and materials need to be optimized, product life cycles must be extended, new models for product use have to be developed, and solutions for end-of-life recycling need to be found.
According to research, this shift in the supply chain paradigm has the potential to cut emissions by up to about 40%, and it is more cost effective than any other approach to decarbonizing the supply chain.
Circularity can also positively impact other environmental and social issues, such as waste, land use, water use, and poor working conditions.
Because of its potential, circularity has received substantial attention across stakeholders and industries as a leading and holistic solution. Fashion and consumer electronics are at the center of the conversation and predestined as frontrunners in the solution given the characteristics of the products, consumption behaviors and usage-waste cycles within these industries. Since increased circularity builds on an increasing number of multidirectional flows of goods, logistics service providers are the needed enablers and accelerators of the transition.
As such, this particular stakeholder group is positioned to take on the task of redesigning these flows in highly efficient, user-friendly ways.
According to the whitepaper, the fashion and consumer electronics industries drive a large share of GHG emissions and other environmental impacts (including resource, land and water use, as well as waste).
Together, their carbon footprint makes up approximately 6% of global emissions. Consider that currently, around 20% of garments produced are never used, and smartphones are often exchanged after just 2–3 years.
Therefore, the positive impact that circularity in these two industries could have is pronounced, and industry front-runners are actively participating in the paradigm shift toward circularity.
WHY FASHION AND CONSUMER ELECTRONICS ARE IDEAL CANDIDATES FOR CIRCULARITY
Manufacturing in both fashion and consumer electronics requires vast amounts of often nonrenewable resources (including raw materials and energy inputs) and is the source of significant emission levels.
Compared to leading sectors such as automotive parts, for example, the reuse, refurbishing, and recycling processes in fashion and consumer electronics are less advanced and widespread.
Fashion and consumer electronics have high reach and relevance to almost everyone. Some sectors are relatively niche, others have larger consumer bases – and then there is fashion and consumer electronics: almost every consumer is active in these two retail categories in both their private and professional lives.
The supply chains of these two sectors are very complex and globalized. They cross many continents and companies, necessitating sophisticated coordination in the supply chain for maximum impact.
Fashion and consumer electronics have high visibility and multiplier effects. The industries are often in the focus of media attention and play a prominent role in the public dialogue. A move toward circularity in fashion and consumer electronics could therefore have broad signaling effects beyond the two industries, with both potentially serving as role models and helping other industries become more circular.
While fashion and consumer electronics represent particularly large opportunities in circularity, many of the circularity challenges are universal. Hence, the insights presented here can potentially be applied to other sectors, and industries across the board could certainly mitigate their environmental impacts by making circularity a bigger part of their product life cycles.
The global fashion and consumer electronics industries have a sizable impact on climate change. A conservative estimate for the fashion sector suggests that it is responsible for about 4% of annual global GHG emissions (up to 8%, according to other sources) and that the consumer electronics sector’s share of GHG emissions is approximately 2%. Combined, these sectors represent twice the share of GHG emissions of the aviation industry (3%).
At current consumption levels and under current approaches to managing the life cycles of these products, emissions from these industries would grow by 60% until 2030 and account for around 20% of the UN GHG emissions target for 2030, which is set at half of today’s emissions.
The fashion industry depends on non-renewable resources as well, as synthetic fabrics (such as polyester) are often produced using fossil fuels. Another major issue is the extensive land use required by these industries. Fashion clearly has the largest impact, requiring 40 million hectares, mostly for cotton farming. This means that an area larger than the size of Germany and Switzerland combined is used.
Waste from fashion products is often landfilled or incinerated – about 75% of the produced volume – causing additional emissions.
For example, in fashion, 71% of carbon emissions occur in the production phase, while around 20% of emissions are caused during product use (especially by washing).
The 5 Rs of circularity – reduce, repair, resell, refurbish, recycle – provide the critical dimensions along which circularity can be achieved.
REDUCE:
There is significant overproduction, especially in fashion (20-30%). “Reduce” is the circularity “R” that refers to production, and it does so in two ways. First, it aims to reduce the overall volume; fewer new products need to be manufactured when the lives of existing products are significantly extended, production is increasingly on demand and overproduction is limited. Second, circularity also means that the profile of product inputs changes, where a shrinking share of inputs are raw/virgin materials and the negative impact of resource and materials use shrinks accordingly.
REPAIR:
Fixing damaged products whenever possible, either via do-it yourself home repair or via professional repair services, is a clear intervention toward extending the life and maintaining the value of many consumer goods. Several fashion companies are already piloting offerings for fashion repair in combination with consumer education (for example, Patagonia’s free repair offering to end consumers). In consumer electronics, Apple recently announced an offering of spare parts for common phone and laptop repairs to consumers, albeit limited to selected models. Government legislation known as “right to repair” reinforces this activity by ensuring that goods – particularly household appliances – are manufactured with ease of repairability in mind.
RESELL:
The average time a fashion product is used is little more than 3 years. That length of time is just 2 to 3 years for smartphones. Reselling is the opportunity for a product owner to sell products that are still highly functional but that they no longer wish to use. The reduction in GHG emissions from resale is significant, but resale rates in fashion and consumer electronics are lower than they are in other sectors –for example in automotive, where reselling cars is the default.
In addition, there is a significant volume of totally unused fashion products (about $2.1 trillion) in consumers’ closets around the world. For example, the average UK consumer owns unused garments worth $270. These products could be put to productive use via resale. Strong moves in this resale direction are already visible today, for example, in the fashion industry.
A new ecosystem of digital resale-as-a-service offerings is emerging, where players such as Trove and Reflaunt operate the resell business on behalf of brands and retailers. In addition, both established (such as eBay, Zalando) and recently launched (such as Vinted) independent digital marketplaces allow for a peer-to-peer resale of garments.
Globally, use of recycled materials in fashion production remains low, with about 95% of garments produced from virgin materials. Some fashion retailers, however, are offering drop-off options for used
clothing in combination with shopping vouchers to motivate more sustainable consumer behavior (for example, H&M with its “Let’s close the loop” take-back program for used clothes).
B: CIRCULAR SUPPLY CHAIN
As circularity ultimately revolves around the movement and flow of goods, supply chains have to be redesigned and new supply models developed. Two main challenges arise, namely i) how to capture end-of-life products and unused items to reintroduce them into the cycle and ii) how to design product flows and cycles in the most suitable, efficient, and environmentally friendly way. Accessing end-of-life products will require convenient return flows and collection that incentivize consumers to participate.
The volume of return flows will increase as a result of circularity, implying that return flows need to be well integrated into the existing supply chain. As such, products with different post-sale interventions (for example, reselling, refurbishing, or recycling) or from both B2B and B2C flows (such as unsold items and consumer returns) can be transported and processed in a consolidated form to make the process convenient and efficient for consumers and logistics players.