Around two decades back, green logistics or sustainable deliveries was a term that was rarely used among the common masses. To put it simply, businesses considered it as a non-vital or “value-add” concept to adopt and handle. But in the past decade, there has been a quantum leap in how companies perceive green logistics. The primary reason for this transformational change in consumer awareness and sensitivity towards environmental issues.
An IBM survey in 2021 stated that 62% of consumers are willing to change their purchase behavior to reduce its negative impact on the environment, up from 57% in 2019.
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What is green logistics ?
Green logistics focuses on calculating and minimizing the environmental impact of logistics activities. It aims to strike the right balance between economic and environmental efficiency.
Why is green logistics significant for modern businesses?
A report on the future of the last-mile ecosystem by the World Economic Forum in 2020, warns that the number of delivery vehicles will increase by 36% until 2030. The cities are responsible for 70% of global emissions, and a major proportion of it can be attributed to delivery trucks and vans. If there is no effective intervention, the cities will be burdened with massive congestion and high emissions.
The same report states that the demand for last-mile delivery, sometimes called the final mile, will grow by 78% by 2030. To handle this increasing demand for last-mile delivery cost-effectively and minimize the fuel emissions from deliveries, businesses should adopt green logistics as a vital step.
Minimize CO2 footprint
The increasing urban population and order frequencies have resulted in increased carbon emissions. There are some important factors that lead to increased carbon emissions in the last mile. Working on them helps you minimize the carbon footprint. They are:
- Distance a vehicle travels
- Number of vehicles in use
- Amount of fuel consumed
- Number of empty trips made
- Reattempted deliveries
- Overlap of delivery routes
- Number of delivery trips
- Vehicle fill rate
- Warehouse location
- Type of vehicle
- Rate of product returns
Walmart has already reduced 650,000 metric tonnes of CO2 with the help of their logistics automation solutions. Also, they are planning to reduce 1 billion metric tonnes of greenhouse gas emissions by 2030. By optimizing their delivery routes and improving their fleet efficiency, they are looking to scale up this measure of carbon footprint reduction.
Reduce time spent in traffic
At the time when on-time delivery has become mandatory to win customers, any minor delays can hamper your brand reputation. One of the major reasons that contribute to delivery delays in the urban delivery zones is the traffic.
An increase in delivery volumes in large cities is making it challenging for businesses to plan and assign loads to their drivers. Especially when fulfilling a mix of scheduled and on-demand orders, many companies operate fleets without carrying full loads. The struggle to balance the time windows and capacity utilization is a pain point for operation managers.
By using a delivery route planner, one can factor in the vehicle capacity constraints and traffic issues simultaneously and generate an optimal plan. It helps you avoid major traffic restrictions on the way and improves fleet utilization, so that you carry full loads when dealing with mixed orders. When there are last-minute order changes, its dynamic rerouting feature updates optimal route plans in real-time and lets your driver make the best use of his/her rides.
Maximize fuel savings
Businesses want to increase the number of deliveries drivers complete in a day and minimize the mileage their vehicles consume on the road. The rising fuel cost is a big headache for delivery managers especially when they set out to plan delivery routes. But how can we maximize the deliveries and minimize the mileage? The answer lies in a logistics solution.
By investing in technology solutions like cutting-edge last-mile logistics solutions, you can set up efficient multi-stop routes for your drivers that cut down on distance traveled, empty miles driven, and fuel emissions into the atmosphere. You can easily group together the vehicles that need to go to the same area and at the same time window. With this effective batching of fleets, you can maximize the drop density by reducing the number of vehicles and maximize fuel savings.
Prioritize your electric delivery vehicles
Regulations are increasingly becoming tighter with respect to allowing highly polluting vehicles on roads. They are trying to incentivise the usage of electric vehicles by increasing the parking spaces for them in city spaces, providing tax breaks for eco-friendly vehicles, improving the range and quality of charging infrastructure, and fines for high emissions. Many of them have banned the entry of most polluting and bulky vehicles during a specific time frame. This has forced the delivery businesses to adopt electric vehicles as a part of green logistics measures.
Imagine that you have electric vehicles and they can travel a maximum of 80 milex. With the help of a delivery route planner, you can assign loads within a distance of 50 miles, schedule a battery recharge and schedule pickups on its way of returning back. For any deliveries beyond 50 miles, it automatically allocates that load to conventional fuel vehicles. This helps you deliver products on-time to areas where there are stringent environmental regulations.
Plan your warehouse locations wisely
A few years ago, businesses began moving closer to customers in densely populated urban areas to reduce the fuel consumption and make deliveries quickly by investing in micro-fulfillment centers.
Micro-fulfillment centers are mini-warehouse locations situated in densely populated urban areas. Being situated closer to customer destinations, you can make deliveries on time and serve a maximum number of customers at minimal operational costs. Using eco-friendly vehicles, delivery route planners with micro-fulfillment centers reduces your operational costs and makes your logistics operations more sustainable.
Optimizing your reverse logistics process
Modern customers make online decisions based on whether a product offers them returns and replacement facilities. If not, they move on to buying the same product from another online store. Hence, it has become crucial to optimize the reverse logistics process the same way you optimize the forward logistics.
Imagine you deliver milk to neighborhood localities and pick up the glass bottles the milk is delivered in. There may be people who order milk in the morning and others during the evenings.
With the help of a logistics solution, you can plan your delivery routes for the morning milk deliveries. When you plan the delivery routes for evening milk deliveries, you can schedule the pick up of empty milk bottles delivered during mornings when drivers return from deliveries. It ensures that you don’t need to send additional vehicles for collecting them separately and saves on fuel emissions. Further savings can be gained by ensuring two or more vehicles do not travel in the same route at the same time.
Final Takeaway: Time to move towards green logistics and gain from it
According to a Forrester survey, one-third of US consumers are now spending more time thinking about climate change and environment than before the COVID-19 pandemic. The only way to win customers, cut operational costs and contribute to a cleaner environment is by adopting green logistics measures.
Investing in technology is paramount to adopting and developing green logistics measures. One such technology that majorly contributes towards making last-mile delivery sustainable is a final-mile logistics solution. By providing insights on carbon emissions, fuel consumption, delivery costs, delivery delays and route deviations, it helps you balance cost, convenience and sustainability. It helps in rightsizing your fleet requirements and avoid delivery route overlaps, so that you improve your fleet utilization and reduce vehicle emissions. Finally, its route planning solutions create the optimal routes to reduce the number of miles driven, and subsequently, lower emissions.
References
- https://www.ibm.com/downloads/cas/WLJ7LVP4
- https://corporate.walmart.com/newsroom/2021/12/08/walmart-creates-industry-first-by-introducing-science-based-targets-for-supply-chain-finance-program
- https://corporate.walmart.com/media-library/document/2018-global-responsibility-report/_proxyDocument?id=00000170-ac54-d808-a9f1-ac7e9d160000
- https://www.forrester.com/blogs/empowered-consumers-call-for-sustainability-transformation/#:~:text=Overall%2C%20consumers%20are%20hyperaware%20of,before%20the%20COVID%2D19%20pandemic.
- https://www3.weforum.org/docs/WEF_Future_of_the_last_mile_ecosystem.pdf
