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What is green logistics?

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How can route optimization help freight carriers in their CSR strategy?

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report CSR route optimization

The Covid-19 health crisis has greatly contributed to the surge in online sales. All the different lockdowns have pushed consumers who did not use the internet for their daily shopping to take on new habits and are now buying online more frequently, resulting in an increase in deliveries and their polluting emissions. More than ever, it is now essential for manufacturers to make their supply chains greener and reduce their environmental impact. Beyond transportation, every part of the supply chain can be optimized for environmentally friendly logistics, also called “Green Logistics”.

A definition of green logistics

Green logistics consists in using more eco-friendly and sustainable processes in order to reduce the environmental impact of logistics. This approach covers the entire life cycle of the product: manufacturing, storage, transport, marketing, use and disposal.

More specifically, it involves:

The use of ecological raw materials and recyclable materials

The use of clean or renewable energy

Optimized distribution networks

Cross-docking for supply management

Decrease in the number of vehicles used and the number of kilometers traveled

Environmentally friendly means of transportation

Trucks loaded to full capacity

Optimised routes

Recycling returned or end-of-life goods

 

Implementing a green supply chain also means carefully selecting the suppliers you work with, analyzing your own processes and also the life cycles of your products.

Warehouses, which are major resource consumers and waste producers, are also reinventing themselves:

  • Built with natural materials that are sustainable over time,
  • Reinforced insulation to reduce energy use (in summer and winter),
  • Clean energy source (wind or solar),
  • Energy-efficient LED interior lighting or natural light from windows,
  • Automatic motion detection system to limit light use,
  • Rainwater collection for watering the green areas of the warehouse or for sanitation,
  • Green roof…

Besides reducing the environmental impact, Green Supply Chain Management allows to reduce operational costs, especially thanks to a decrease in the use of electricity, water and resources.

[INFOGRAPHICS]
What is green logistics?

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The last mile is at the center of environmental issues facing the transport industry

Among the most polluting industries, shipping accounts for many greenhouse gas emissions. According to CITEPA (Centre Interprofessionnel Technique d’Etudes de la Pollution Atmosphérique), light trucks account for 20% of GHG emissions from transport and heavy trucks vehicles account for 22% [1]. The last mile is the most costly stage, both economically and environmentally: it accounts for more than 20% of total delivery costs and is responsible for 30% of CO₂ emissions according to figures published by the Strategic Analysis Committee [2].

  • Mainly because warehouses have moved further away from city centers, increasing the distance traveled: the average distance of parcel delivery agencies from the heart of Paris has increased from 6.3 km in 1974 to 18.1 km in 2010 according to the Institut Paris Région [3].
  • Also, because most deliveries are home deliveries. The health crisis has led to a decrease in the number of deliveries made at pick-up points (68% of shoppers used this method in 2020 compared to 83% in 2018 according to FEVAD). This type of delivery has a very good carbon footprint when customers use clean mobility solutions (walking, public transport, cycling), which is mostly always the case in urban areas.
  • And finally, because the order frequency has increased: while in 2011, French consumers ordered on average 1.2 times per month, they now order 3.5 times, which is almost three times more in less than 10 years [3].

The environmental impact of last mile logistics is affected by different elements, including: the type of vehicle, the vehicle fill rate, the number of trips required to deliver the customer, and the rate of return products (estimated at 10% or even 30% in some industries like textile).

At the end of the supply chain, the environmental impact of the last mile can be reduced by using innovative tech solutions, such as delivery route optimization solutions. In addition to lowering the operational costs of routes, this type of tool helps reduce CO₂ emissions generated by this activity by reducing:

  • The number of vehicles used,
  • The distance they travel,
  • The amount of fuel they use,
  • The number of empty trips made.

See how the technology developed by Kardinal is part of a sustainable logistics strategy

Some experts point out that one of the current challenges in making green logistics more available to the public is to raise consumer awareness. Consumers have increasingly demanding expectations regarding the speed of their delivery. In the case of e-commerce sales, they tend to choose fast deliveries without thinking about the environmental impact. We need to educate consumers to think about their choices (“Do I really need this product to be delivered within 24 hours? Can’t it wait a few days or even a few weeks?”, “Wouldn’t a delivery in a pick-up point be better than at home?”) and guide them towards a more eco-responsible delivery.

Brands also have a role to play in raising awareness and can, for example, inform their customers of the real cost of their delivery, including the environmental cost. A survey by the French Senate in May 2021 confirms this lack of information: 93% of respondents felt insufficiently informed about the environmental impact of the delivery of their online purchases [4]. About 90% of respondents expressed their wish to have this information and more than 85% thought that it would have an impact on their choice of delivery method.

Green logistics is promoted by local authorities

Largely encouraged by the introduction of new environmental regulations (e.g. LEZ), green logistics is gradually becoming a requirement. In 2050, more than two thirds of the world’s population will live in cities according to the UN [5], compared to nearly 56% in 2019 [6]. Despite covering only 2% of the Earth’s surface, cities produce 80% of greenhouse gas emissions. In response, more and more cities are implementing actions to improve air quality and reduce polluting emissions, including:

  • Pedestrianization of roads,
  • The creation of bicycle lanes and new public transport services,
  • Banning the most polluting or bulky vehicles from certain areas,
  • Restricted stopping in delivery areas,
  • Increasing the number of parking spaces reserved for electric vehicles,
  • Mandatory reporting of emissions generated by the vehicle.

Given these different regulations, carriers must adapt to new constraints and many are already renewing their fleet for more eco-friendly vehicles in preparation for these changes.

Thanks to subsidies (including the ecological bonus-penalty in France), public authorities are encouraging citizens and companies to acquire hybrid or electric vehicles. Many carriers are already aware of ” carbon-free ” logistics, such as Deret Transporteur, the first European clean transport network made up of 54 electric trucks. The “last mile” deliveries made by the carrier are all eco-friendly. The use of clean vehicles such as bicycles or cargo bikes (electric or not) is also increasingly common.

Green logistics allows companies to address one of the major concerns of consumers and meet their new expectations. Last mile delivery is still a real environmental challenge to overcome, a challenge that is at the heart of Kardinal’s mission. Although the logistics industry still has work to do, many players are committed and have already begun to reduce the environmental impact of their operations. By taking part in the development of green logistics today, companies can stand out, stay ahead of the curve and, above all, be among the leaders in the green transition.

Do you want to make your logistics more green? Contact our experts to talk about your project!

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