Circular Economy & Pay-per-Use: Sustainable Financing in Practice

Summary
Linxfour is a European leasing company based in Austria that finances manufacturing machinery and equipment across countries and industries on a Pay-per-Use basis. This form of financing directly supports R4, R5 and R6 of the KLW aspects thanks to the comprehensive financing agreement including maintenance, spare parts and, if necessary, consumables.

Initial Situation
The customer in the following project - Swiss Mail Solutions is a global fulfilment service provider that processes around 55,000 shipments per month and uses over 7,200 m² of warehouse space in Europe and Asia for this purpose. The company reached its logistical limits with manual warehouse processes in 2021. Small items, such as pens or lipsticks, were picked manually in large pallets, which was time-consuming and labour-intensive. The processes were inefficient, error-prone and led to a high workload for staff.

Project Description
Together with the machine manufacturer Kardex, two automated Kardex Miniload-in-a-Box systems were installed to efficiently store 1,360 containers on just 49.2 m². Instead of purchasing the machine in the traditional way, the fulfilment service provider opted for the Linxfour Pay-per-Use model including full maintenance. This approach finances a modern and efficient storage system and also fulfils aspects R4, R5 and R6 of the circular economy. The full maintenance contract included in the Pay-per-Use contract ensures regular, professional maintenance with original parts, which extends the service life of the machines in the long term.

Solution
By investing in the miniloaders on a Pay-per-Use basis, the fulfilment service provider was able to increase its storage density by 100% and at the same time reduce walking distances by more than 80%, resulting in significantly more efficient storage. The model also guarantees the customer that the machines can be returned to the manufacturer at the end of the contract period. There they are overhauled and modernised before being returned to the secondary market for their next use.

Circular Economy Aspects

• R4 Reuse:
  With Pay-per-Use financing and the associated return guarantee, the machine is returned to the manufacturer at the end of the leasing contract. It is then resold on the secondary market and used again.

• R5 Repair:
  As a full maintenance contract (inc. spare parts) is part of the Pay-per-Use contract, machines are maintained in line with the manufacturer's specifications. This increases the residual value and marketability, extending service life in the long term.

• R6 Refurbish:
  If the machine manufacturer takes the machine after the lease expires, it is repaired, modernised and resold. Take-back guarantees promote the circular economy.