The need to implement sustainable practices into the supply chain has been steadily gaining traction in recent years. The Coronavirus crisis highlighted the importance of going green and provided a fresh start and time to consider new sustainable policies. Additionally, some government policies have been brought forward in hopes of reaching 2030 emissions targets, placing pressure on providers to adopt more sustainable practices sooner than initially anticipated.
Sustainability has been at the forefront of people’s minds for some time, and significant steps are being put in place to reduce the environmental impact of parcel shipping. However, over the last twelve months, e-commerce deliveries have soared due to the shift towards online shopping during the Coronavirus crisis. This dramatic surge in demand has placed sustainability directly into the spotlight, most notably many are scrutinising how green last-mile deliveries are.
It is unsurprising e-commerce has a less than glowing reputation for being environmentally friendly. Many will be accustomed to the sight of overly large boxes stuffed full of packaging peanuts or bubble wrap to transport an item less than half the size. There is also the additional issue of online sales leading to an increasing number of returns, adding to costs in terms of fuel, manpower and vehicle trips.
As online shopping becomes the ‘norm’ for many consumers, retailers and logistics providers are grappling with the environmental challenges associated with soaring e-commerce sales. Retailers and logistics providers are currently workings towards cutting down carbon emissions, preventing delivery vehicles from clogging up roads, and reducing packaging while simultaneously making sure products are delivered without being damaged. There is the additional challenge of trying to get stock back into warehouses quickly to ensure quick sales turnover once the item has been returned to the retailer.
On average a domestic package travels over 1,000 miles between its origin and the end customer despite the same item being available at a retail location just a few miles away from the customer. According to Accenture, last-mile delivery accounts for 53% of the total cost of shipping – and 41% of total supply chain costs. Additionally, without any interventions, there will be a further 32% jump in carbon emissions from urban delivery traffic by 2030.
The Coronavirus crisis already had some positive impact on carbon emissions. In 2020, carbon emissions fell by 6.4%, or 2.3bn tons, as lockdown measures and travel restrictions brought economic and social activities to an abrupt standstill. It would not be wrong to assume that the surge in e-commerce packages and their accompanying packaging would not be overly helpful in reducing carbon emissions. However, in-store fulfilment options gained traction, and the last-mile became a little greener, with many retailers repurposing their brick-and-mortar stores as local fulfilment centres. Retailers were able to repurpose empty brick-and-mortar stores, utilising them as local omnichannel fulfilment centres allowing customers to collect or return deliveries.
Though in-store fulfilment is nothing new and has been adopted by retailers in recent years, the Coronavirus crisis accelerated the trend. Heading beyond the crisis, many brick-and-mortar stores have been left vacant in the pandemic’s aftermath and could be repurposed into local fulfilment hubs. It is estimated that retailers who adopt utilising local fulfilment centres within their supply chain strategies could reduce last-mile emissions between 17-26% through to 2025.
Source: Transport Intelligence, April 20, 2021
Author: Beth Poole