Destination: SUSTAINABILITY NEESHA SALIAN
LOGISTICS COMPANIES ARE INCREASINGLY WORKING TOWARDS ADOPTING SUSTAINABLE PRACTICES, FROM REDUCING THE OVERALL AMOUNT OF PACKAGING USED, TO ENHANCED DELIVERY SCHEDULES THAT CAN BE FULFILLED IN LESSER TRIPS
With businesses being increasingly urged to reduce their carbon emissions and adopt more sustainable business models, the logistics and transportation industry is under tremendous pressure to follow suit, and for good reason. According to the Sustainable Freight Buyers Alliance (SBFA), freight transport accounts for 8 per cent of global CO2 emissions. By 2050, direct CO2 emissions from the logistics sector is set to rise by 42 per cent. The alliance, a bridge between freight buyers and freight decarbonisation initiatives to support the industry’s transition to net-zero freight transport, states that decarbonising freight transport is critical to achieving the global goals of net-zero greenhouse gas emissions by 2050.
Is that a tall order? Dr Shereen Nassar, Global Director of Logistics Studies, Edinburgh Business School, Heriot-Watt University Dubai, says decarbonisation targets can only be addressed when companies relook at their traditional working methods. “Logistics and transport sustainability goals need to
be developed and integrated within the business model and strategy to ensure accountability and compliance with environmental, social and economic requirements by all the stakeholders, including governments, non-government organisations (NGOs), citizens, investors, customers and companies themselves.”
Transparency is critical when it comes to reporting emissions, which is mandatory in certain countries. Bodies such as the Global Logistics Emissions Council (GLEC), an industryled partnership is driving emission reduction across global logistics supply chains through global guidelines for reporting and reducing logistics emissions that work for business.
The council is led by the Smart Freight Centre, an international non-profit organisation focused on reducing greenhouse gas emission from freight transportation. The centre and the World Business Council for Sustainable Development recently reiterated their commitment to increase transparency on carbon emissions and work towards a net-zero logistics sector. Supported by the World Economic Forum, with McKinsey & Company providing analytical insights and advisory guidance, and in partnership with over 25 global organisations, this consortium is taking the next steps in achieving net-zero logistics by co-developing an actionable and implementable framework to quantify the impact of GHG (greenhouse gas) logistics emissions from the supplier to the final customer; from end-to-end.
The adoption of sustainable practices across the sector is gaining momentum. Dr Nassar says that logistics companies are increasingly working towards it, from reducing the overall amount of packaging used, to enhanced delivery schedules that can be fulfilled in lesser trips.
“Retailers are now becoming more conscious of the kind of logistics service providers they use. As a result, electric, hybrid and low carbon emission vehicles are becoming increasingly important in the logistics fleet. In addition, reusing and recycling are integral to a sustainable supply chain. As a step further toward sustainability, initiatives are growing for the transformation from a linear supply chain toward a closed-loop and circular supply chain model that are key to sustainability. This model requires close partnership with supply chain partners to establish sustainable practices throughout the supply chain to support a circular plan for the full lifecycle of a product and its packaging,” adds Dr Nassar.
Despite the willingness to go carbon neutral and achieve net-zero targets, there are hurdles. The Covid-19 pandemic led to a rise in e-commerce; and while customers want sustainable products, they want them immediately and, at reasonable prices. This means more deliveries, traffic congestion and even more emissions.
According to a study by the World Economic Forum, by 2030, last-mile delivery emissions are set to increase by more than 30 per cent in 100 cities globally. Additionally, these commutes could increase by 21 per cent, taking up to 11 minutes longer due to the extra traffic on the road. And while companies are taking to using electric delivery vehicles, it’s
Retailers are now becoming more conscious of the kind of logistics service providers they use. As a result, electric, hybrid and low carbon emission vehicles are becoming increasingly important in the logistics fleet”