It may not be easy being “green,” but individuals and businesses of all sizes are taking significant steps. They’re recycling, transitioning alternative fuels, and taking a variety of other actions to reduce their carbon footprints, protect the environment, and reduce the effects of climate change
As consumers, many of us are making conscious decisions about where and when to purchase goods. One study estimates that 60% of shoppers would be willing to adjust their shopping behavior to reduce their environmental impact, while 70% said they’d pay more to support environmentally responsible and sustainable brands.
Similarly, several industries are stepping up to address sustainability. Companies like Nike and Adidas are focused on reducing waste, minimizing their carbon footprints, and eliminating use of plastic bags. Car manufacturers, like BMW and Toyota, are improving energy efficiency and reducing pollution. They are not alone – 62% of executives believe they need a sustainability strategy to be competitive today, while another 22% sees it as important for their future.
But there’s one sector – supply chain logistics – that has been slower to adopt sustainable practices. And now is the time for these companies to step up and do their part to cut emissions, reduce their carbon footprint and address waste.
Challenges Persist
For logistics vendors, this may be easier said than done. Shipping and delivery are resource-intensive businesses – from the packaging required to protect products on their journey to the fuel used along the supply chain to get the products in the hands of consumers. World Economic Forum data shows that the number of delivery vehicles in inner cities will skyrocket 36% by 2030 to keep up with increasing demand for e-commerce delivery. At the same time, emissions associated with last mile delivery will grow by more than 30% across the top 100 cities.
Last mile delivery is, perhaps, the most inefficient link in the supply chain. Even though some delivery companies are turning to alternative fuel vehicles, there are overall more vehicles hitting the road to meet rising consumer demand for delivery services, as the WEF noted. Plus, these vehicles travel many more miles than necessary as a result of poor planning and exception management. As a result, logistics companies have to contend with inefficiencies, such as empty miles, multiple delivery attempts and idling vehicles that waste fuel.
Strategies for Improving Sustainability
Though these challenges may seem insurmountable, here are four strategies that can help drive sustainability in the logistics sector:
#1 – Engage Customers
Consumers are already putting pressure on retailers to offer green shipping options, and that pressure is filtering down to the logistics vendors and delivery companies. During the purchase process, customers can be provided with estimates of carbon emissions associated with different delivery options. Given current trends, they're likely going to select the most environmentally friendly option - such as next-day shipping over same-day delivery, or combining shipments to arrive at a later date.
#2 – Optimize Routes
Solutions should be employed to better plan delivery routes in order to cut down on the number of miles driven, as well as limiting emissions and the amount of fuel consumed. Addressing avoidable inefficiencies in drivers' routes – such as proximity to hubs, delivery time windows, traffic, and weather patterns – will enable logistics vendors to lessen their environmental impact and improve operations at the same time.
#3 – Improve Communication with Real-Time Tracking
Giving customers the ability to track their packages in real time and communicate directly with the delivery drivers can go a long way in reducing missed deliveries and requiring re-attempts. Customers can be at a delivery location to get their products the first time, saving on fuel usage and reducing the odds that packages will be damaged and have to be returned.
#4 – Enhance Operations with Artificial Intelligence
So much data is being generated from logistics operations on a daily basis, but it's rarely leveraged to its fullest extent. Seek out big data solutions that utilize AI and machine learning to get useful insights into fleet performance and help identify areas of improvement, such as reducing miles traveled, shrinking inventory footprints, and decreasing the number of damaged goods.
Yielding Results
These strategies are not theoretical; they're being used by real logistics companies to reduce their carbon footprint and become better stewards of the environment. AI-driven solutions are helping companies look at all the stops their drivers make during a day to find the most efficient sequences and routes. Insights from this data can help shorten total distance travel, resulting in as much as a 10% reduction in fuel consumption across a fleet – saving both the environment and money.
Taking strategic steps to decrease fuel consumption and cut out waste and inefficiency in logistics is now a priority as more companies put a premium on protecting the environment. Sustainability in logistics can be achieved if companies are willing to go beyond simply moving to alternative fuel vehicles. The keys to success are engaging consumers in your company's sustainability goals, leveraging technology to have real-time visibility into operations, and applying AI to drive more efficient routes.
