The actions and policies adopted to minimize the negative effects of transportation, warehousing and other logistics activities on the environment are called green logistics or ecologistics. The goal of these policies is to create sustainable value that balances economic and environmental efficiency, while the traditional approach to logistics marginalizes environmental sustainability in the decision-making process.
In fact, the goal of green logistics is to balance ecology and economy, and achieving this goal requires efforts to minimize the carbon footprint in the environment while maintaining the highest quality standards.
Adhering to the Paris Climate Agreement and the United Nations Sustainable Development Goals has made reducing energy consumption a top priority for all industries due to the pollutants it leaves in the environment. Organizations also try to reduce water, soil, air and noise pollution by changing the way they use their resources, such as reusing containers, recyclable packaging, more efficient use of transportation capacity, etc.
The results of IBM Research Insights indicate that 57% of consumers are willing to change their e-commerce habits to reduce environmental pollution. Companies, in turn, adjust their supply chain and logistics systems based on this goal. This transition happens slowly as managers place a higher priority on sustainability in their organization’s activities.
The results of a survey have shown that only 10% of the managers participating in this survey have stated that they differentiate their business in order to reduce negative effects on the environment and intend to gain more market share based on having the most environmentally friendly services. get the environment. However, when the right technology and supply chain strategies are implemented, these solutions can reduce the cost of service delivery while enhancing brand image. This is especially true for the last logistics step of the package delivery process to the final customer (Last Mile Delivery), where retailers and logistics companies can simultaneously reduce carbon emissions and overhead costs.
Objectives of green logistics
Carbon footprint measurement in logistics operations; One of the most common methods for calculating energy consumption and greenhouse gas emissions is the international standard UNE-EN16258:2013.
Reducing air, soil, water and noise pollution by analyzing the impact of each logistics activity, especially those related to transportation.
Optimum use of equipment by reusing and recycling packaging practices
Extending sustainability in the supply chain: Eco-logistics is shaped by the design of products and their packaging, and both must be designed to minimize their environmental impact.
Why green logistics?
The transportation industry has a major impact on greenhouse gas emissions and is the number one emitter of greenhouse gases in the United States with a share of nearly 28%. According to the WEF survey, this share is expected to increase to 30% with the rise of online shopping and the subsequent rise of Last Mile Delivery.
Retail supply chains are the logistics industry’s biggest contributors to greenhouse gas emissions, and they became more influential especially after the emergence of the Corona pandemic; As e-commerce grew exponentially, package shipments increased and shipping exceeded the capacity of many logistics service providers.
These alarming statistics have made all players in the field of logistics, including retailers, transport industry operators and consumers, realize the importance of adopting a strategy to realize green logistics in their supply chain.
There are compelling reasons to move towards green logistics; Including:
Green logistics policies represent a strategic advantage over competitors. These policies not only re-evaluate and differentiate the commercial value of brands, but also prepare the organization for the future.
Energy conservation is an effective strategy to deal with rising supply costs.
Green logistics policies ensure that a company is prepared to comply with environmental regulations.
The impact of technology on green logistics
Technology is the most powerful human tool to improve industrial efficiency and reduce carbon emissions, and green logistics is no exception. Technology has changed the logistics sector for the better over the past decade, but there is a bigger transformation ahead.
For example, routing technologies help vehicles take the shortest and least congested route to save energy. Likewise, 3D truck load planning can reduce the number of empty truck trips. For example, TIMOCOM, a logistics company based in Germany, helps businesses to identify free and empty truck capacity and avoid running empty routes and the environmental impact of excess traffic by entrusting their loads to them.
Blockchain technologies, which are changing the way business transactions are conducted, are also an emerging opportunity for green logistics and sustainable supply chains. Thanks to the high insight and transparency that blockchain technology provides, organizations will need less time to optimize their logistics operations.
Costs of ignoring green logistics
Retailers and logistics operators who do not pay attention to the environment will be left behind in the coming years.
It is a joint effort between companies and logistics service providers who work together to reduce carbon emissions in the environment and are therefore in a unique position to acquire new customers. Not only are consumers looking for ways to minimize their environmental impact, but many are willing to pay more for green products. Therefore, a company that does not have a strategy for green logistics will be at a fundamental disadvantage.
With proper supply chain management, green logistics essentially creates more efficient processes that reduce energy consumption and can increase profits in the long run. This can be seen in the delivery routes.
Challenges facing green logistics
Today, many organizations face significant obstacles in implementing environmental policies in the field of logistics. Including:
Dependence on fossil fuels, especially in transportation: Unfortunately, effective and cost-effective solutions to reduce dependence on fossil fuels in transportation of goods have not yet been found.
Impact of Last Mile Delivery on Urban Traffic: In particular, the delivery of e-commerce orders has greatly increased the number of package delivery vehicles in large cities.
Lack of infrastructure: Local authorities are setting emission limits. However, an inter-sectoral agreement is needed to create new facilities that meet the needs of those involved in logistics activities.
Invisibility of logistics for consumers: In general, for the customer, the partial logistics sector is invisible. When a customer requests a 24-hour delivery of their goods, this request prevents the consolidation of loads or the maximum use of the transport flow, and in this way, it becomes difficult to apply green logistics policies. In addition, logistics costs are often either not mentioned in the invoices or are considered very small. Therefore, the incentive to invest in environmental sustainability decreases.
Despite all the challenges raised, adapting green logistics to a proper business strategy will help companies stay ahead of their competitors in many ways. As environmental regulations around the world become more and more stringent, maintaining green values differentiates brands, increases their credibility, and at the same time prepares the world for the future; A future that should undoubtedly be green.