Environmental sustainability is becoming an increasingly important topic within the courier industry and global supply chain. It is vital for businesses and consumers to move towards sustainable infrastructure and a net-zero carbon footprint.
According to the United Nations Climate Action, fossil fuels (Coal, oil, and gas) are the largest global climate change crisis contributors. The United Nations has stated that over 75% of global greenhouse gas emissions and nearly 90% of CO2 emissions can be attributed to fossil fuels.Â
Over the last few decades, the global carbon footprint has increased, driving individuals and businesses to switch to a more sustainable and environmentally friendly practice, ensuring the future of our planet and the life on it.
Environmental sustainability involves more than just reducing the carbon footprint. To improve their environmental sustainability, businesses and consumers must begin to mitigate the harmful effects and damages already caused.Â
Consumers are becoming increasingly aware of how their actions contribute to the global climate crisis and are beginning to make responsible decisions regarding sustainable choices. Just as consumers make the correct choices, it is becoming increasingly important for businesses to implement sustainable business practices to help curb the global warming crisis.
The European Environment Agency has stated that the logistics industry is responsible for nearly a quarter of the global carbon dioxide emissions in 2023. However, experts have expressed that the logistics industry will be responsible for 40% of global carbon dioxide emissions by 2040 if no action is taken to curb the logistics industry’s carbon footprints.
One of the biggest reasons why the logistics industry has such a devastating impact on the environment is due to the hydrocarbon fuels that the sector’s industry relies on. When logistics companies increase their awareness of environmental sustainability and adopt greener practices, we can begin to curb the rise in CO2 emissions.Â
Consumers and logistics, supply, and courier businesses are faced with developing more sustainable supply chain operations to curb the current and potential consequences and damage caused by the global trade sector.
The Environmental Impact of Global Supply Chains
To answer these questions, consumers and companies must first understand the environmental impact of global supply chain operations. A 2016 report by McKinsey showed the environmental impact of the global supply chain industry is as follows:
- By 2025, almost two billion people are expected to become global consumers. This is an increase of 75% from 2010.
- Less than 20 percent of all supply chain managers note that they have visibility into sustainability practices.
- Over the next 20 years, the consumer sector will grow by 5 percent.
- More than 90% of the environmental damage caused by CPG (consumer packaged goods)Â companies is directly related to the supply chain.
- 80% of greenhouse gas emissions-related damages can be attributed to CPG companies.
- To meet climate change agreements set out by annual COP (conference of parties) conferences. CPG companies must reduce their emissions by over 90 percent by 2050.
- The environmental impact on the global supply chain isn’t just limited to harmful gas emissions; water scarcity, issues with land use, toxic waste, deforestation, air quality, energy use, and water pollution are all important considerations.
Consumers today are beginning to prefer brands actively working to increase their positive impact on the environmental impact. Green logistics has become a growing talking point.
What is Green Logistics?
Green logistics reduces the overall impact of the delivery and logistics processes on the environment. There has been an increased emphasis on choosing green a supply chain and courier companies within the consumer sector. For shipping and courier companies to be successful in this eco-conscious age, they must begin to;
- decrease their carbon emissions footprint
- implement eco-friendly waste disposal and management
- use recyclable packing materials
- make use of sustainable recycling practices
The topic of green logistics covers the process of reducing the carbon footprint of the global supply chain, correctly managing waste disposal, reducing carbon emissions related to packaging and recycling, and improving overall energy consumption.
Sustainable supply chains include first, middle, and last-mile logistics. For these stages of the logistics industry, the solution to becoming green lies in implementing correct digitization. Through correct digitization, logistics, and courier companies can reduce their energy consumption by using alternative fuels and increased efficiencies such as last-mile delivery optimization and eliminating their paper trail.
Is Green Logistics the Same Thing as Reverse Logistics?
No, green logistics is not the same thing as reverse logistics. This is a common misconception, as reverse logistics is when a product travels backward (in reverse) within the logistics flow. Examples of reverse logistics can be package returns and item recycling.
Some types of reverse logistics address environmental issues, but not all reverse logistics specifically relate to general logistics practices.
For the logistics process to be green, the transportation solution, such as last-mile delivery and courier services, must actively include efforts or solutions to reduce carbon emissions and include sustainable practices. This can be done by implementing processes to include multiple item pick-ups within a delivery driver’s daily flow. An excellent example would be a courier company offering a delivery service where the driver will drop off items with customers and collect packages on the way back to the distribution center.
Want to learn more about courier services and delivery drivers? Read our guide, Courier Services: A Complete Guide for 2023.
Why has Green Logistics Become a Priority within the Retail, Courier, and Logistics Industry?
The transportation and freight industry has had a massive negative impact on global greenhouse emissions, with 28 percent of the United States’ greenhouse gas emissions being attributed to the transportation sector. According to the World Economic Forum’s report, this percentage is expected to increase by 30% due to the growing demand for e-commerce delivery within inner cities.
Retail supply chains are the biggest contributors to over 50 percent of carbon emissions within the logistics sector. While this may seem alarming, it comes as no surprise due to the eCommerce industry taking off during and after the COVID-19 pandemic.
To combat this increase in carbon emissions, retailers are actively combating carbon emissions by taking the Net-Zero pledge and implementing strategic plans that promote environmental sustainability.
The Cost of Not Going Green
In the coming years, retailers and courier businesses that don’t implement a green approach to their business will be left behind. Companies taking the plunge and going green will have a unique selling proposition to gain new customers.
Simply put, companies that refuse to adopt a green business approach will see reduced business and a dwindling customer base, but also increasing pressure to make the switch.
With the correct supply chain management protocols in place, green practices will create efficient cost savings and sustainable logistics operations focusing on reduced energy consumption and optimized delivery routes, increasing overall profit.
An example of the many benefits of going green can already be seen in the courier industry and its delivery routes. Couriers can decrease the mileage and time spent per delivery by adopting an optimized delivery route system. This reduction in delivery time leads to more deliveries being completed by the same delivery driver on the same run (drop density), resulting in a lower carbon footprint.
How can Technology Help Build Sustainable Courier and Global Supply Chains?
Technology can help local courier companies and the global supply chain industry by introducing more sustainable and ethical practices to businesses within these industries. Technology will help improve regulatory supply chain compliance, reduce waste and supply chain sustainability costs, reassure consumers about environmental sourcing, and enhance reputation and branding, thanks to sustainable practices.
Here are six key ways technology can help build a sustainable courier and global supply chain sustainability.Â
1. Transparency Surrounding Ethical Sourcing
Entire supply chain management needs visibility into how suppliers produce or extract raw materials to ensure that suppliers follow the correct sustainability standards. Supply chain managers can use blockchain technology to capture and verify the supplier’s sourcing practices. Blockchain technology will provide supply chain managers with IoT devices that will help monitor and report on environmental factors and working conditions.
2. Reduce Overproduction by Driving Efficient Supply and Demand PlanningÂ
To reduce the overproduction of raw materials, businesses need to solve any misalignment between the supply and demand planning that could result in the overproduction or underproduction of raw materials, distribution of products, or manufacturing of goods.Â
By eliminating any misalignment, businesses won’t have to deal with waste or any rework that can be detrimental to the environment. The solution to this issue lies in Artificial intelligence, predictive analytics, and machine learning.
These technologies can predict the correct consumer demand and ensure businesses can access an improved manufacturing and supply chain process.
3. Optimize Delivery Routes to Minimize Fuel Consumption
Until courier services and other businesses within the logistics industry move to electric and other sustainable vehicles, and delivery route optimization is the best way to help reduce the environmental impact of this industry. GPS route optimization and AI can help optimize international, national, and intercity shipping and delivery routes.
Technology can provide delivery drivers and business owners with advanced analytics to update real-time routes to factor in the best mileage, fuel usage, and traffic-related issues.
4. Consolidate Shipments to Fully Utilize Containers and Transportation
Predictive analytics can help businesses predict where and when goods and items will arrive while consolidating supplier shipments to different final destinations. Predictive analytics allows companies to efficiently use assets ( like containers, delivery fleets, and warehouses) to reduce the total amount of greenhouse gas emissions created per cargo load.
5. Streamline Supply Chain Sustainability Processes to Reduce Waste
Implementing advanced analytical software can introduce major changes to supply chains. Improving supply chain processes can reduce waste, increase delivery times, and enhance product quality, improving the global supply chain sustainability.
6. Plan Around Existing Environmental Risks and Impacts
Sustainable supply chain technology helps predict the risks and impacts many supply chains face due to climate change. Technology can help businesses implement contingency plans to deal with environmental factors negatively affecting the sector and help the environment by reducing greenhouse gas emissions.
How Can Green Logistics Reduce Costs?
A common misconception about switching to green logistics is that it can be costly. However, this is completely false. When courier and logistics companies switch to an environmentally focused business model, they will reduce supply chain costs. Here are seven ways delivery and supply chain companies can improve their last mile delivery and logistics operation to be as efficient and eco-friendly as possible.
1. Increase vehicle efficiency with automated route optimization.
Automated route optimization affords businesses and their drivers the luxury of drastically reducing their mileage. Automated route optimization allows courier businesses to plan routes for vehicle fleets that are efficient, cut costs by reducing the number of vehicles on the road, lower fuel consumption through improved route planning, optimize multi-stop routes, and reduce the company’s overall energy usage.
2. Use bike couriers for local, urban logistics.
While the courier industry is dictated by rapid SLAs (service-level agreements) with little room for rout optimization within densely populated urban areas, businesses can use on-demand eco-friendly delivery services, such as making local deliveries via droid, foot or bike.Â
Bike couriers may not be the best option for all packaging sizes, but bike couriers can be the perfect option for a company specializing in small-order deliveries within hyperlocal urban areas. Bike couriers have no fuel and release zero emissions, and as an added benefit, the delivery person receives a workout during deliveries.
3. Digitize the paper trail.
The shipping process is filled with paper. Technologies such as digital automation and cloud-based services eliminate companies’ need to leave a paper trail. Courier and other logistics companies switching to a digitized delivery system will reduce operational expenses, increase their day-to-day business operations efficiency, and minimize their carbon footprint.
4. Green logistics – how logistics providers are reducing emissions.
Businesses that switch to green can batch shipments together for a higher delivery driver drop density.
A higher drop density improves the effectiveness of automated route planning. When companies use delivery batching, they can reduce the number of vehicles on the road and increase their maximum energy efficiency.
5. Incentivize sustainable delivery options.
On-demand delivery can be incredibly wasteful as courier services dispatch on vehicles that could easily fit multiple items. An Accenture Strategy report showed that 36 percent of online consumers were happy to wait longer for free delivery.
Dispatching an order from same-day to next-day delivery gives courier services and retail businesses more time to optimize dispatching and delivery routes. This also provides consumers with sustainable options related to delivery, which generally lowers business delivery costs.
Incentivizing planned delivery is a massive win for the customer (they pay less), the business (lower operating costs, and the environment ( reduce emissions). However, businesses should carefully balance the need for express deliveries with incentivized planned deliveries to find a happy medium between customers and on-time delivery times.
6. Use intelligent fleet management to dispatch to eco-friendly delivery vehicles fleets.
Intelligent fleet management applications and software can be used to prioritize the dispatch of an eco-friendly and renewable energy delivery fleet (vehicles with renewable energy sources such as hydrogen fuel cells, electric vehicles, and hybrid fuel vehicles).
Eco-friendly delivery fleets lower the total business energy and fuel consumption and reduce their carbon emissions.
7. Perform hyperlocal and local deliveries from stores rather than warehouses.
Hyperlocal deliveries can reduce a retailer’s delivery costs by removing exorable shipping and distribution center costs. Local deliver-from-store courier services enable lower fuel costs and faster delivery times.
How Courier Companies Can Achieve a Zero Waste Future
The environmental impact of supply chains will continue to be a major issue for supply chains. Consumers and businesses becoming increasingly aware of how goods are sourced, manufactured, and delivered.
A sustainable supply chain with the correct technology solutions and sustainable practices will help businesses create sustainable operations.
Green logistics and switching to more eco-sustainable is becoming increasingly important as businesses scale up their last mile delivery operations to meet growing consumer demand.
To successfully create green logistics that are cost-effective and eco-friendly, companies need to prioritize sustainability, collaborate with green partners, and adopt digitalization within their day-to-day operations.Â
As green logistics becomes a major priority for every sector involved in the logistics industry and processes, businesses incorporating eco-friendly practices will be able to increase brand approval and drastically reduce total carbon emissions, saving on fuel consumption and creating energy savings for their business.
Have any thoughts on the importance of environmental Sustainability in the Global Supply Chain and Courier Industry? Leave a comment below!
FAQs
What is Green Logistics?
Green logistics reduces the overall impact of the delivery and logistics processes on the environment. There has been an increased emphasis on choosing green supply chains and courier companies within the consumer sector.
Is Green Logistics the Same Thing as Reverse Logistics?
No, green logistics is not the same thing as reverse logistics. This is a common misconception, as reverse logistics is when a product travels backward (in reverse) within the logistics flow. Examples of reverse logistics can be package returns and item recycling.
Some types of reverse logistics address environmental issues, but not all reverse logistics specifically relate to general logistics practices.
How can Technology Help Build Sustainable Courier and Global Supply Chains?
Technology can help local courier companies and global supply chains by introducing more sustainable and ethical practices to businesses within these industries. Technology will help improve regulatory business compliance, reduce waste and company overheads, reassure consumers about environmental sourcing, and enhance business reputation and branding.
How Can Green Logistics Reduce Costs?
A common misconception about switching to green logistics is that it can be costly. However, this is completely false. When courier and logistics companies switch to an environmentally focused business model, they will reduce supply chain costs.Â
