The importance of sustainability in logistics is not something to be overlooked. It plays a big role in ensuring the well-being of the environment, society and the long-term viability of businesses.
Logistics operations have a significant environmental footprint mainly through greenhouse gas emissions, fuel consumption, and waste generation. The logistics and transportation industry contribute over a third to emissions each year. Embracing sustainability practices in logistics can help reduce these negative impacts and contribute to efforts to combat climate change and preserve our planet's natural resources. A lot of sustainable logistics practices often lead to cost savings in the long run by improving energy efficiency and optimising routes. Not only that, but logistics companies also have a social responsibility to the communities they serve. By embracing sustainability, shows a commitment to ethical practices, and this can ultimately act as an advantage to consumers and hence drive sales and consumer satisfaction.
First and last-mile deliveries are often completed using conventional vehicles like trucks and vans. These vehicles are heavily contributing to traffic congestion, air pollution and greenhouse gas emissions. Delivery routes often involve frequent stops and starts which increases fuel consumption and costs for the business, which are ultimately passed on to the consumer. By implementing sustainable alternatives like electric or hybrid vehicles the negative environmental impact can be reduced massively. Carbon emissions for electric last-mile delivery vehicles are 55% lower compared to the typical diesel van (Source: E-Power Trucks). While the cost for a business of running an electrical vehicle is only 9p per mile as opposed to the petrol vehicle at 21p per mile (Source: The Eco Experts), there are several set-up costs that can deter a business from implementing electrical vehicles. Installation costs for charging points range from £700-£1000. However, there are many schemes such as the Workplace Charging Scheme that offer grants for discounted installation.
Source: Parcelly Ltd
Customers now expect faster and more convenient deliveries and meeting these expectations can sometimes lead to inefficient delivery routes and higher emissions, achieving both sustainability goals and balancing customer expectations is a challenge that requires innovative solutions. Over 80% of shoppers want same-day shipping and to take that a step further, over 61% want their package in 1-3 hours (Source: Invesp).
Failed deliveries on the expected day of delivery can cause losing 83.5% of clientele (Source: Upper Route Planner) and so by offering out-of-home delivery options such as PUDO (Pick Up Drop Off), customers are able to receive their goods on time, whilst also ensuring that routes are optimised and there is as minimal emissions as possible while avoiding multiple delivery attempts. This is also beneficial to the carriers as it allows them to get paid quicker and avoid the costs associated with multiple delivery attempts. Retailers have revealed that 10% of deliveries are not delivered on the first attempt costing on average £15 per order (Source: Capgemini).
To improve overall sustainability in first and last-mile deliveries, logistics companies can implement several strategies such as utilizing shared or consolidated delivery models in order to optimise routes and reduce unnecessary trips. By partnering with companies who offer solutions such as a network of PUDO locations, Cross Docking and Hyperlocal Warehousing, they will allow themselves to reach their sustainability goals while also delivering on their promise to the customer and managing their expectations for delivery times. For example, a hyperlocal warehousing solution allows retailers to store their most popular products closer to the customer, this in turn allows them to meet or even exceed customers' expectations of 1–3-hour delivery times. By using a solution like hyper-local warehousing, retailers can reduce the cost of the last mile by 30% (Source: Forbes) by cutting down on routes and decreasing the distance between the product and end customer, which in turn would benefit the environment due to decreased emissions. As well as exceeding customer expectations, 62% of customers have said they would be willing to consider alternative delivery options if retailers provided emissions data at check-out (Source: Internet Retailing).
By adopting electric or alternative fuel-powered vehicles they can reduce their emissions whilst also appealing to consumers with strong sustainability values. In addition to this, governments are promoting laws that favour the replacement of diesel vehicles with electric vehicles and many countries offer tax credits to organisations that opt for this kind of vehicle.
Sustainability in logistics is crucial for mitigating environmental impacts, reducing costs and enhancing a company's reputation and competitiveness. By incorporating sustainable practices into their operations logistics companies can contribute to a more sustainable future while also reaping the business benefits. So to answer the question we initially asked – are sustainability and logistics compatible? Well, it seems that if we want to reduce the impact on our planet and prolong the life of it, they simply have to be!
