More consumers are considering the environmental impact of their lifestyles. However, a rise in the adoption of sustainable lifestyles, including veganism and a shift to sustainable purchasing choices in fashion for example, presents a double-edged sword for logistics companies. A surge in people demanding more sustainable products simultaneously can cause significant challenges in the supply chain, but to not adopt more environmentally friendly operations could hinder a company’s financial prospects.
Avocados are a prime example of the challenge supply chains face in meeting consumers’ demand for sustainable produce. Considered to be a “superfood” due to their perceived health benefits, a small pack of two avocados is estimated to have an emissions footprint of 846.36g of CO2, almost double the amount of 1kg of bananas (480g). It would be too simplistic to suggest that retailers stop selling ‘sustainable’ goods even if the wider environmental benefits are questionable – demand is already too high to ignore. Veganism has increased 500% since 2017 and its popularity continues to grow. And as consumers become more environmentally conscious, logistics providers face a growing range of challenges.
Amongst the challenges are the sometimes contradictory demands of consumers themselves, who want more sustainable products but want those products to arrive swiftly and to their convenience. A study completed by Future Commerce found that the top three requirements for e-commerce websites are free shipping, free returns and two-day delivery, suggesting cost and speed come at the expense of sustainability in some purchasing decisions. The logistics industry has responded with efforts to meet sustainability demands and combat the emissions produced within the logistics industry – LSPs have already implemented or pledged to reduce their carbon footprints either by investing in electric vehicles or switching to new fuels.
Electric vehicles or new fuels only combat a fraction of carbon emissions, however. For true transformation, sustainable practices need to be implemented throughout the entire supply chain. There are sector-based challenges too. In the food supply chain for example, the carbon emissions related to food waste and non-recyclable packaging often offset the emissions prevented by carbon neutral delivery options. In order to have a tangible impact on reducing carbon emissions, logistics companies have the opportunity to work with partners throughout the supply chain to develop truly sustainable solutions. The good news is examples already exist, with companies such as Gucci already claiming to be carbon neutral.
Sustainability may well be the latest consumer ‘fad’ however, unlike crocs sustainability appears to be a trend that will stand the test of time. Until now sustainable practices have not been matched by consumer demand and so may have been considered an unnecessary expense. Consumers are increasingly aware and influenced by companies’ records and initiatives around sustainability which is now driving the demand. However, a study conducted by DHL revealed that implementing sustainable practices into the supply chain will not sacrifice profits. Instead sustainable practices can support key business drivers, including customer loyalty, brand reputation and performance. If logistics providers aim to secure contracts, they will need to quickly adapt. However, for this to change the logistics industry will require new operational and partnership models in order to develop a new system that is ‘sustainable’.
Source: Transport Intelligence, January 28, 2020
Author: Beth Poole