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How digital logistics is making green logistics achievable

Jan Tore Pedersen | 09. Dec 2019
4 minutes read

According to the Smart Freight Centre in the Netherlands, transport is Europe’s biggest climate problem, accounting for 27% of total EU emissions. With authorities and consumers expecting businesses to reduce their emissions, there is a growing push for eco-friendly solutions, especially in Transport & Logistics (T&L).

But how do you go about integrating sustainability into your logistics operation?

 

Transport – Europe’s biggest climate problem

Heavy-duty vehicles make up less than 5% of all vehicles on the road, but they are responsible for 26% of road transport carbon emissions. Statistics also show that 20% of freight trucks in Europe are driving around empty and that the others are, on average, only half full. This means that many companies are actually paying to transport large amounts of unused space.

Hence, filling trucks and other load units as much as possible, while minimising the kilometres travelled is a key step towards optimising the use of resources, i.e. reducing carbon footprint and cost.

Lowering the total travelled kilometres brings extra environmental benefits in the form of reduced number of vehicles on the roads. This will in turn lead to reduced congestion, fewer accidents and less traffic. This is why the logistics community is turning to green logistics as a crucial concept for a sustainable logistics operation. 

 

Advantages with green logistics  

In a paper published by DHL, two core advantages of eco-friendly logistics is explored:

1. The ‘License to operate’ advantage

Strengthen ‘license to operate’ and improve company reputation.

Integrating sustainability into your supply chain management approach can provide further positive advantages for your company, such as improving its reputation – and obtaining ‘social permission’ to conduct business from your stakeholders (also called ‘license to operate’).

 

2. Additional revenue streams advantage

Sustainability drives process and product innovation, thereby generating additional revenue streams.

Sustainable solutions can have a direct and positive impact on customer satisfaction and profit, if new products and services...

  1. Help address new customer segments
  2. Reduce production costs by using different materials
  3. Can be offered using more efficient processes

The DHL paper also discuss the myth that green logistics represents a financial burden. Traditionally, investing in sustainable technologies and innovations to reduce environmental impact has been viewed as hurting companies’ bottom line. But DHL’s overall conclusion is that achieving sustainable logistics does not mean sacrificing profits. Sustainable practices can support key business drivers, including customer loyalty, brand reputation and performance.

 

truck-on-the-road

Digitalisation is making green logistics achievable

So, is environmentally-friendly logistics achievable? Absolutely.

The topic of green logistics should be on the agenda for every supply chain professional, as innovative supply chain management (SCM) systems are required to minimise harmful effects on the environment.

According to "The Interrelation between Sustainability and Green Logistics", significant reduction of carbon emissions, as well as costs during transport, is “achievable by optimising the design of a logistics network, using the right modes of transportation and managing efficiently the load capacities and routes”. Digital logistics enables shippers of goods to get their product from factory to client with less waste and a smaller carbon footprint by bundling shipments together. Digital logistics is the most cost-effective and risk-free way of turning sustainability into an integral component of supply chain management.

Conclusion

Sustainable supply chain management drives efficiency and is increasingly seen as an essential requirement to deliver long-term profitability in the logistics sector. In fact, green logistics and profitability go hand-in-hand. Sustainable logistics practices help drive positive business change by helping companies save costs, strengthen ‘license to operate’ and generate additional revenue streams. By saving the environment, you enhance financial performance.

 

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