23 September, 2024
As online shopping becomes the norm, it is also transforming the logistics industry. E-commerce transportation, storage and delivery forecast to grow annually by 22.3% from 2023 to 2030. But as businesses put more vehicles on the road, they are also facing the need to make their supply chains more environmentally friendly.
Thanks to ongoing innovations, however, there are a variety of ways for companies to reduce emissions—from eco-packaging and electric vehicles, to wider strategies. In this article, we’ll provide a sustainable logistics definition, and discuss the options available to companies seeking to improve their transportation.
Thanks to ongoing innovations, however, there are a variety of ways for companies to reduce emissions—from eco-packaging and electric vehicles, to wider strategies. In this article, we’ll provide a sustainable logistics definition, and discuss the options available to companies seeking to improve their transportation.
What is sustainability in logistics?
Sustainable or ‘green’ logistics refers to practices that reduce or mitigate the environmental impact of logistics across each aspect of the journey. Often, these practices are supported by technological innovations, including energy-efficient transport methods, resource management and advanced route planning.
Ultimately, in asking ‘what is sustainable logistics’, what is being discussed is all measures involved in cutting CO₂ emissions and managing the lifecycle of goods, which we’ll explain in more detail further on.
Ultimately, in asking ‘what is sustainable logistics’, what is being discussed is all measures involved in cutting CO₂ emissions and managing the lifecycle of goods, which we’ll explain in more detail further on.
What’s the importance of sustainable logistics?
Logistics and sustainability are deeply intertwined, as the movement of goods worldwide accounts for 8% of greenhouse gas (GHG) emissions, with transport more broadly representing 24%. The EU and other countries including the UK are also aligned in efforts to achieve net-zero emissions by 2040. The importance of sustainability in logistics, therefore, is part of a broader ambition of making our planet more environmentally friendly in the long run, primarily by reducing CO₂ emissions, but in other ways also.
Currently, inefficient logistics negatively impact efforts to make freight transportation more environmentally sound. Some key issues include empty miles (or ‘deadheading’, where vehicles travel without cargo), insufficiently used storage spaces, and poorly managed journey routes incurring higher energy usage and costs.
As a result, sustainability in logistics tends to pivot on how efficiently resources can be used. This can include efforts to use storage spaces more efficiently, or reducing the number of ‘empty miles’ (also known as deadheading) where vehicles travel without cargo. It also encompasses route and warehouse optimisation so that every truck, train, ship or plane is efficiently packed and no journey time is wasted.
Currently, inefficient logistics negatively impact efforts to make freight transportation more environmentally sound. Some key issues include empty miles (or ‘deadheading’, where vehicles travel without cargo), insufficiently used storage spaces, and poorly managed journey routes incurring higher energy usage and costs.
As a result, sustainability in logistics tends to pivot on how efficiently resources can be used. This can include efforts to use storage spaces more efficiently, or reducing the number of ‘empty miles’ (also known as deadheading) where vehicles travel without cargo. It also encompasses route and warehouse optimisation so that every truck, train, ship or plane is efficiently packed and no journey time is wasted.
What sustainability certifications exist for shippers?
The internationally-recognised certificates for transportation are ISO 14001 and B Corp certifications. The former proves that a business has an environmental management system and
Its purpose is so businesses ‘can ensure they are taking proactive measures to minimise their environmental footprint, comply with relevant legal requirements, and achieve their environmental objectives’.
B Corp status covers standards for several key areas, including environment but also governance and workers. To be certified, companies are assessed on how they work towards sustainability, specifically, looking at the impact of ‘facilities, materials, emissions, and resource and energy use, as well as transportation/distribution channels and the environmental impact of their supply chain’.
Its purpose is so businesses ‘can ensure they are taking proactive measures to minimise their environmental footprint, comply with relevant legal requirements, and achieve their environmental objectives’.
B Corp status covers standards for several key areas, including environment but also governance and workers. To be certified, companies are assessed on how they work towards sustainability, specifically, looking at the impact of ‘facilities, materials, emissions, and resource and energy use, as well as transportation/distribution channels and the environmental impact of their supply chain’.
What are some examples of sustainable logistics practices?
Optimising sustainability in logistics covers many aspects of the transport process. Many shippers will be familiar with the need to reduce disposable packaging, but cutting emissions can be achieved through a sustainability strategy that considers all aspects of the supply chain:
1. Inventory management
Sustainable inventory management accounts for the environmental, social and economic effects of all decisions around existing stock levels. Not only does efficient management save money, it also helps conserve energy and minimises waste.
Getting the most out of inventory levels can begin with procurement: choosing local suppliers to shorten transportation routes and as a result cut CO₂ emissions from transport.
In terms of managing stock, there are also digital solutions available to companies, such as inventory management systems, that help them avoid overstocking and make sure every corner of the warehouse is used effectively.
2. Sustainable vehicles
The vehicles used to move cargo can make a significant difference to logistics sustainability. Many shippers will be aware of the ongoing push towards zero-emissions vehicles. While the industry is yet to see these rolled out as much as one would hope, green freight transport solutions continue to see promising development.
Electric vehicles are a clear example, although currently these only serve to move freight sustainably over short distances. Another promising innovation is hydrogen fuel-cell trucks, which generate electrical energy in a way that’s different to trucks that use a more conventional electric lithium battery.
Amazon Freight now has 20 fully-electric Volvo trucks in operation to move freight cargo between warehouses. Our network also leverages the 1,200 electric vehicles used by Amazon Prime to deliver packages emissions-free.
3. Intermodal transport
Intermodal is the name given to using different methods or ‘modes’ of transport, from rail to road and sea freight, to improve logistics performance. In harnessing the strengths of each mode, it ensures that, for each mile of the cargo journey, the most sustainable option is being used.
For example, rail freight container transport only generates 1% of total transport CO₂ emissions. By using train or sea containers (if shipping internationally) for a portion of the journey, and then road freight for the ‘first’ and ‘last’ mile, companies can cut the total emissions of their freight logistics.
4. Route optimisation
Digital tools are also enhancing logistics’ managers and businesses’ ability to make routes as efficient as possible, reducing energy costs, empty miles and emissions. Smart route planning software gives shippers an additional layer of control over the sequence of freight journeys, helping reduce costs and maintain on-time delivery under tight schedules.
Meanwhile, a Transportation Management System, or TMS, uses algorithms to optimise the flow of goods. It can also check relevant compliance documentation, payments, and provide analytics on logistics performance. These capabilities help shippers boost efficiency to reduce emissions, but also cut costs and improve profitability.
5. Eco-friendly packaging
It’s not just about the planet—customers also like to have shipments delivered in right-sized, easily recyclable packaging. This mitigates the environmental impact of every good shipped by minimising waste, while also making sure the product is in excellent condition.
Here, technology again lends a hand. At Amazon facilities, for example, machine learning helps our team determine which products are fit for flexible packaging (e.g. padded bags) which can reduce the weight of parcels by up to 75%.
Amazon also uses recyclable packaging methods such as paper delivery bags, cardboard envelopes and replacing protective single-use air pillows with curbside recyclable paper material.
1. Inventory management
Sustainable inventory management accounts for the environmental, social and economic effects of all decisions around existing stock levels. Not only does efficient management save money, it also helps conserve energy and minimises waste.
Getting the most out of inventory levels can begin with procurement: choosing local suppliers to shorten transportation routes and as a result cut CO₂ emissions from transport.
In terms of managing stock, there are also digital solutions available to companies, such as inventory management systems, that help them avoid overstocking and make sure every corner of the warehouse is used effectively.
2. Sustainable vehicles
The vehicles used to move cargo can make a significant difference to logistics sustainability. Many shippers will be aware of the ongoing push towards zero-emissions vehicles. While the industry is yet to see these rolled out as much as one would hope, green freight transport solutions continue to see promising development.
Electric vehicles are a clear example, although currently these only serve to move freight sustainably over short distances. Another promising innovation is hydrogen fuel-cell trucks, which generate electrical energy in a way that’s different to trucks that use a more conventional electric lithium battery.
Amazon Freight now has 20 fully-electric Volvo trucks in operation to move freight cargo between warehouses. Our network also leverages the 1,200 electric vehicles used by Amazon Prime to deliver packages emissions-free.
3. Intermodal transport
Intermodal is the name given to using different methods or ‘modes’ of transport, from rail to road and sea freight, to improve logistics performance. In harnessing the strengths of each mode, it ensures that, for each mile of the cargo journey, the most sustainable option is being used.
For example, rail freight container transport only generates 1% of total transport CO₂ emissions. By using train or sea containers (if shipping internationally) for a portion of the journey, and then road freight for the ‘first’ and ‘last’ mile, companies can cut the total emissions of their freight logistics.
4. Route optimisation
Digital tools are also enhancing logistics’ managers and businesses’ ability to make routes as efficient as possible, reducing energy costs, empty miles and emissions. Smart route planning software gives shippers an additional layer of control over the sequence of freight journeys, helping reduce costs and maintain on-time delivery under tight schedules.
Meanwhile, a Transportation Management System, or TMS, uses algorithms to optimise the flow of goods. It can also check relevant compliance documentation, payments, and provide analytics on logistics performance. These capabilities help shippers boost efficiency to reduce emissions, but also cut costs and improve profitability.
5. Eco-friendly packaging
It’s not just about the planet—customers also like to have shipments delivered in right-sized, easily recyclable packaging. This mitigates the environmental impact of every good shipped by minimising waste, while also making sure the product is in excellent condition.
Here, technology again lends a hand. At Amazon facilities, for example, machine learning helps our team determine which products are fit for flexible packaging (e.g. padded bags) which can reduce the weight of parcels by up to 75%.
Amazon also uses recyclable packaging methods such as paper delivery bags, cardboard envelopes and replacing protective single-use air pillows with curbside recyclable paper material.
What are the benefits of sustainable logistics for businesses?
To summarise the above points in brief, sustainable logistics practices:
● Help improve compliance
● Support greater profitability
● Eliminate waste
● Reduce CO₂ and greenhouse gas emissions
One more benefit for companies who prove their sustainability credentials can be enhanced brand loyalty. According to a 2023 report from Deloitte, ⅓ (34%) of consumers say their trust in brands “would be improved if they were recognised as an ethical/sustainable provider by an independent third party”.
● Help improve compliance
● Support greater profitability
● Eliminate waste
● Reduce CO₂ and greenhouse gas emissions
One more benefit for companies who prove their sustainability credentials can be enhanced brand loyalty. According to a 2023 report from Deloitte, ⅓ (34%) of consumers say their trust in brands “would be improved if they were recognised as an ethical/sustainable provider by an independent third party”.
What are the challenges of sustainable logistics?
Working towards a more regenerative and environmentally friendly transport sector faces distinct obstacles:
Regulatory requirements: Maintaining compliance does involve additional work for many companies and can be initially costly
Infrastructure: Many businesses encounter a lack of existing infrastructure to boost sustainability, e.g. insufficient available charging points for vehicles
Time constraints: Managers and business owners have to spin many plates on a daily basis, which can make pursuing certification, monitoring supply chain partners’ practices and even overhauling transport management a challenge
Despite the upfront cost and initial difficulties, it is urgent that businesses can green their supply chains and strive to reduce emissions where possible. Thankfully with the help of innovative software solutions like TMSs and route optimisation, driving efficiency and decarbonising logistics can boost business margins, according to a report by McKinsey.
Visit our newsroom to learn more about our efficient freight solutions, including our carbon-saving Intermodal services and other planet-focused initiatives.
If you have any questions about our decarbonisation efforts, send us an email at freight-uk-interest@amazon.com, and one of our team would be happy to speak with you.
Regulatory requirements: Maintaining compliance does involve additional work for many companies and can be initially costly
Infrastructure: Many businesses encounter a lack of existing infrastructure to boost sustainability, e.g. insufficient available charging points for vehicles
Time constraints: Managers and business owners have to spin many plates on a daily basis, which can make pursuing certification, monitoring supply chain partners’ practices and even overhauling transport management a challenge
Despite the upfront cost and initial difficulties, it is urgent that businesses can green their supply chains and strive to reduce emissions where possible. Thankfully with the help of innovative software solutions like TMSs and route optimisation, driving efficiency and decarbonising logistics can boost business margins, according to a report by McKinsey.
Visit our newsroom to learn more about our efficient freight solutions, including our carbon-saving Intermodal services and other planet-focused initiatives.
If you have any questions about our decarbonisation efforts, send us an email at freight-uk-interest@amazon.com, and one of our team would be happy to speak with you.
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