The logistics and transport industry is one of the largest contributors to global carbon emission, which last-mile delivery falls into. In a time when consumers are becoming more environmentally conscious, ensuring sustainable last-mile delivery is now more critical than ever for retailers and logistics companies.
In our latest panel discussion, we sat down with sustainability logistics experts to hear how they are making last-mile deliveries more sustainable. The discussion was moderated by Zsofia Agnes Nagy, Freelance Supply Chain Adviser, and was joined by:
- Bernard Wiley, Head of Logistics, Who Gives a Crap
- James Atkinson, Sustainability Programme Manager, DPD Ireland
Putting a price on carbon
Carbon dioxide is a key greenhouse gas that drives global climate change. From product manufacturing to delivering it to customers, each process leaves behind a carbon footprint. Almost every delivery vehicle that you find on the roads today is diesel-powered.
A great initiative that many companies have adopted, including both DPD Group and Who Gives a Crap, is to put a price on carbon. Since carbon is now registered as a cost to the business, companies would find ways to reduce emissions to reduce operating expenses. Evaluating the cost of carbon incurred in deliveries can help to build accountability and incentivize organizations and leaders to look for low-carbon alternatives.
Many logistics carriers today have started replacing diesel-powered delivery vehicles with electric vehicles. DPD Group, for one, has set aside 200 million euros to decarbonize, improve their entire operation, and reduce emissions.
James from DPD Ireland shared that there is still a challenge with proving the cost-effectiveness of electric vehicles, however, even with the total cost of ownership model. With electric vehicles (EV) still being at a relatively nascent stage of development, the company still finds it difficult to derive the cost savings of electric vehicles, especially so for the larger delivery vans. Nevertheless, this will change over time as the EV market and technology matures.
From a retailer’s standpoint, Bernie from Who Gives A Crap shared his struggles in achieving carbon-negative last-mile delivery in a country where logistics partners have not rolled out electric vehicles. Even if retailers purchase these vehicles by themselves, there is also an infrastructure challenge where there are no charging spots within the country.
Sustainability in reverse logistics
With online purchases, there is a higher chance of customers returning the products since they have not seen or tested them in person. Although the returns process is in itself not sustainable since there will be more packaging waste, logistics carriers can still put in place a more sustainable process to alleviate the impact on the environment.
One great example that DPD has already done is to ensure that the returns process is efficient. Since returns tend to be less urgent, James shared that they would fully utilize delivery trucks that are already heading towards the same destination to fulfill return orders; this reduces and eliminates the need for additional vehicles that specifically work on returns.
More logistics carriers today have realized the importance of having sustainable practices and they are striving towards becoming carbon negative in the next five years. With so many innovations happening, will carbon-free be the future of logistics?
This is the second part of a three-part series summarizing the key takeaways from our panel discussion. If you didn’t manage to catch the first part of the series, you can read it on our LinkedIn Page here. Follow us on LinkedIn or join our community if you don’t want to miss out on the next article.
For the full discussion, check out the video below. You wouldn’t want to miss it!