A clear view of sustainable logistics and the way to achieve it

Logistics are fundamental to companies and to economic development. As the focus on sustainability increases, as a result of the urgency for climate action, companies are adapting their logistical processes to a new sustainable frame that includes warehousing and transport.

In addition to establishing sustainable work environments, there are several key initiatives that the industry has started in order to consider the reduction of their environmental impact. Sustainable logistics and supply chain management plays an important part in achieving a lower ecological footprint, but also to manage risk and reduce waste costs.

In this Insight, we delve into what sustainable logistics is, how to achieve it and factors to consider when pursuing it.

What is sustainable logistics?

Sustainable logistics looks to reduce the footprint of all activities related to how the resources of a company are handled from acquisition to distribution. The aim is to reduce the overall ecological footprint: CO2 emissions, accidents, and noise pollution, among other things, through alternatives that allow companies to keep the same productivity or improve it. Because it’s worth mentioning, productivity and sustainability are not contradictory.

Many companies are turning their traditional logistics into more sustainable processes. This evolution involves efforts at all company levels and will help maintain the well-being of the planet. But eventually, it will also lead to business benefits.

Container Cargo freight ship with working crane loading bridge in shipyard at dusk for Logistic Import Export background

How can you make your logistics sustainable?

There are four common main initiatives to achieve “green logistics”:

  • select sustainable transport methods and energy sources.
  • choose sustainable suppliers to match your environmental standards.
  • improve the utilization of space and minimize scrapped products due to damages during freight.
  • exchange traditional packaging to sustainable packaging.

Before addressing any of these initiatives, a company must know the footprint left by the company’s logistical activities. With knowledge of the level of pollution that needs to be reduced, it’s possible to find alternatives that removes or lowers it.

One of the easiest first steps to take is to shift the transport method for your goods from air shipment to sea or train freight. Shipping goods in large container vessels emits only 0.7% of the emissions of an air shipment.

Let’s take a look at an example. A shipment of a 20 ft container with 10 tons of goods from Shanghai to Long Beach (CA, US) generates 320 kg CO2. The same 10 tons of goods shipped by air would generate 45,5 tonnes CO2, 142 times more. The following chart shows a comparison of typical CO2 emissions between modes of transport in grams of CO2 per tonne of goods per km.

Chart that shows the CO2 grammes emitted per tonne-km
Figure 1. Source: IMO GHG Study, 2009 (AP Meller-Maersk, 2014)

The second easiest step is to exchange your suppliers, and choose  the carbon footprint of your logistical activities: from choosing sustainable pallets to green packaging, or to substitute the use of virgin plastics for post-consumer plastics.

The impact of choosing a different packaging supplier might look small if we look at the overall logistic process. But every decision and change relieves stress on the environment and helps reach the CO2 emissions reduction goals set up by governments and international organizations.

Let’s consider the business of desiccants. The environmental impact of the desiccant solution in a 20 ft shipping container can be as significant as the carbon footprint of the transport itself (for trucks, train or sea freight). So if you change to an efficient and more sustainable shipping mode, why not change to a sustainable desiccant supplier?

Reduce, reuse and recycle

Sound familiar? These are the three R’s of waste management that serve to reduce your carbon footprint. Reduce means lowering the amount of produced waste. The way to achieve the highest level of reduction is optimizing resource use and to invest in R&D, in order to come up with innovations that help enhance processes.

The second R, reuse, basically means that you should use products more than once, where it’s possible. Implementing reverse logistics to collect part of the used products or their packaging, is the road many companies are taking.

The third R, means recycle and sort waste in order to reduce the incineration of residual waste or eventually, use the recycled materials for new ones, like post-consumer plastic made from recycled plastic.

Are sustainable logistics expensive?

For many years, businesses have focused on the model of lowering costs and increasing profits as the only way to grow. This has been at the expense of environmental costs. But recently, citizens and corporations have finally understood that our production system has led us to expensive costs and devastating consequences for the planet.

Moving your business’ logistics to a cleaner model requires investments: time, money, and resources. If the process is done smartly, it doesn’t have to add any costs at all.  In fact, costs can be reduced and the environmental gain comes for free. And even if it would require some economic investment, isn’t that a fair cost for a responsible and sustainable business model?

Growing business and reducing overhead costs is of course the priority of many companies. But, turning sustainable also brings many benefits, such as reducing the CO2 emissions and the energy waste, lowering the amount of waste products, aligning with national environmental goals, and increasing customer awareness.

Even though at the beginning it may seem a huge effort, the reward to turn sustainable for and because of the environment, will exceed the costs.

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