Research

GREEN Thinking Thinking 2022 2022 2022

The GREEN MILE

Cutting the environmental footprint of the last mile isn’t easy. There are plenty of ways to increase logistics efficiencies, however, that not only help lower costs but emissions too – by Michelle Sturman

Accounting for up to 50% of total shipping costs, the logistical nightmare that is the last mile is currently being battered by an energy crisis, rising fuel prices and inflation, and labour shortages. Simultaneously, calls for the transportation sector to drastically reduce its carbon emissions is getting increasingly insistent.

E-commerce and hybrid working has upped the ante on last mile distribution considerably since the start of the pandemic. Metapack’s E-commerce Delivery Benchmark Report 2021 reveals some interesting consumer data: 32% of respondents, for example, say they value sustainability more than practical factors such as cost and speed in the ‘all-delivery’ economy.

Roughly half of the consumers questioned in Germany, the Netherlands, the US and the UK are willing to consider a lengthier wait for a more environmentally friendly shipment. Only 40% of respondents from France said the same. Germans were willing to pay extra for a more sustainable delivery too (29%), as are the Netherlands (24%), the UK and the US (22%) and France (19%).

According to Metapack’s research, 75% of retailers say a more flexible logistics network is a priority, with 73% planning to use electric vans or hydrogen vehicles (6%), while 24% mentioned bicycles and 61% portering.

73%

Percentage of retailers planning to use electric vehicles in last mile deliveries

ELECTRICAL CHARGE

In our industry, deploying more environmentally conscious modes of transport for the last mile is erratic at best. Some operators are way ahead of the game – WB Mason in the US, Lyreco across Europe and Complete in the UK spring to mind – but the majority lag behind.

The adoption of electric vehicles (EVs) appears to be leading the way in the transition to greener transportation. The Global Charging Infrastructure Market Report by design and consultancy firm Arcadis and the World Business Council of Sustainable Development (WBCSD) reveals that, when it comes to EV investments, the Netherlands emerges as a leader, alongside the UK and the state of California in the US.

The report identified five key parameters critical for supporting investment: government leadership and incentives; EV market maturity and readiness; returns potential; charging infrastructure; and ease of doing business. Based on these metrics, the overall ranking puts the Netherlands top, followed by Germany, the UK, China and Norway.

Says WBCSD Director of Mobility Thomas Deloison: “Widespread EV adoption is key, and even in the slower-to-develop markets, there is progress. This report is a snapshot in time, and regions will boost their scores as they adopt new government EV incentives, increase

their EV charging infrastructure, or as the EV market matures. With clear leadership and the right policy levers in place, EVs can play a prominent role in tackling the climate crisis and improving the quality of life for all communities across the world.”

Still, EVs represent a mere fraction of the overall transport sector. According to the US Environmental Protection Agency (EPA), for example, transportation accounts for the highest source of greenhouse gas emissions by economic sector (27%) in the country.

Globally, with e-commerce rising rapidly and hybrid working taking hold, demand for last mile deliveries is only going to intensify.

THE SMART WAY

US-based logistics intelligence firm Sifted points out that a consequence of recent supply chain issues hitting the headlines has been raised awareness of sustainability failures in the transportation industry. The 2022 State of Supply Chain Sustainability survey by MIT found approximately 80% of executives believed their company’s commitment to supply chain sustainability goals had remained the same or increased during the pandemic.

As Sifted Chief Growth Officer Caleb Nelson states in The Greener Last Mile: “It’s rare to find an industry where being more sustainable equals lower cost. But transportation-related sustainability is a 1:1 trade-off. Being greener can reduce overall cost while also reducing environmental impact.”

In the US, EPA’s SmartWay programme is the “gold standard” according to Sifted, enabling users to measure, benchmark and improve efficiency. The voluntary, public-private endeavour provides shippers with a system for tracking, documenting and sharing information about fuel use and freight emissions across supply chains.

Supported by environmental groups as well as state and local governments, SmartWay certification is a way to show customers, employees and investors a commitment to a more sustainable last mile supply chain.

Aside from such programmes, there are plenty of other options for reducing emissions. The combination of the pandemic and the explosion in e-commerce means end users are becoming accustomed to different delivery options, including increased parcel density or ship from store, kerbside pick-up, buy online pick-up in store, etc. Promoting these methods could lower last mile emissions by up to 26%.

PACKAGING IT UP

The spike in parcel deliveries has seen packaging waste skyrocket too – another huge pet peeve of customers. There are plenty of clever tools to optimise packaging and jettison anything unnecessary. Manufacturers and wholesalers are also becoming more adept at rightsizing boxes.

The latter is not only more environmentally friendly, but can help reduce last mile costs. Box fillers are becoming increasingly eco-friendly by using compostable and biodegradable materials and, where this isn’t possible, at least ensuring the filler can be reused and recycled.

Sifted believes a key to boosting shipping sustainability is to utilise existing data and analytical technology solutions. This can help to interpret patterns for optimised distribution; calculate mileage and fuel usage – crucial for figuring out carbon footprints; model packaging sizes to eliminate waste and lower overall expenditure.

Increasing efficiencies in last mile transfers represent a crucial aspect of building a better logistics infrastructure. Aside from software solutions, according to CB Insights’ Future of Last Mile Delivery report, other key technologies will include autonomous delivery systems, robotic stores on wheels, lockers and storage systems and digital twins.

With clear leadership and the right policy levers in place, electric vehicles can play a prominent role in tackling the climate crisis

In the US, transportation accounts for the highest source of greenhouse gas emissions by economic sector

Source: US Environmental Protection Agency