Green logistics – what is it and why you should pay attention?
Consumers all over the world are showing today a preferance for retailers and brands that are actively taking actions to reduce their environmental impact, so green logistics is more than just another topic – it’s a growing trend in the logistics world.
What is green logistics?
Green logistics, which is also known as eco-logistics, refers to using more eco-friendly and sustainable processes in order to reduce the environmental impact of logistics. This approach covers the entire product lifecycle, from manufacturig to storage, transport, marketing, use and disposal. Green logistics requires business to adopt sustainable policies and other measures to reduce the environmental impact of logistic activities. This is a noteworthy initiative in response to the realisation that supply chain has a great impact on the environment.
According to an IBM report, 54% of consumers are willing to change their purchasing behavior to help reduce environmental impact. However, companies are still resistant to the change. Only 10% of companies identify themselves as pioneers in the green logistics.
When we say green logistics we usually include the carbon footprint of the supply chain, from carbon emission to waste management and waste disposal, packaging, recycling and reducing the energy consumption. Many countries have adopted a set of laws to encourage or enforce sustainability among companies, while prioritizing green consumption for citizens.
Supply chains have three stages: first, middle and last mile logistics. A green supply chain must develop greener processes at each stage. One of the easiest ways to achieve the goals is through digitizing as many processes as possible. Digital processes can be used to eliminate paper, reduce energy consumption and increase the efficiency.
Benefits of adopting green logistics strategies
1. Brand Reputation
Being among the 10% that invest in greener processes can help establish your brand’s reputation. Communicate how you are achieving zero waste and inspire the trust and confidence to your general public to choose you on their next purchase. As consumers become more aware of the environmental effects of global warming, they expect companies to act and reduce their carbon footprint. Therefore, they will prefer eco-friendly companies to those against climate change.
2. Reduce costs
By adopting environmental best practices, you allow your company to cut considerable costs. Here are a few ideas:
- Optimize Transport Management Systems (TMS): The transportation of goods is a major contributor to carbon emissions. When the fleet is inefficient, delivery schedules are not optimized companies are losing money because of empty miles on the road or high fuel consumption. With the aid of digital technologies, logistics departments are now able to eliminate empty miles and optimize driver’s routes, with the benefit of reduced fuel and maintenance costs. You can also consider upgrading your fleet to electrical models.
- Invest in better energy management systems (EMS): implementing more efficient energy systems can lead to a significant reduction in your bills. And aside from the visible operating improvements, the equipament’s life cycle will be also extended. Warehouses and distribution centers may also invest in alternative energy sources, such as solar pannels to put less load on electrical circuits and translating to more savings.
- Improve the warehouses construction: green logistics can also be incorporated into the building’s design. Apart from the energy consumption efficiency, companies can use sustainable construction materials. Reducing packaging is another improvement for warehouses and distribution centers to limit the waste.
3. Competitive advantage
Adopting green logistics early makes you stand out of the crowd, regardless of your niche. It does require a significant cost at the beginning, thus going green is not always the convenient option at the moment, despite numerous studies that prove it’s not safe for our planet anymore. However, it is important to note that all these costs will depreciate in time, making it worth considering. Sustainability is not a fad, but an inevitable trend as global warming continues to worsen. Therefore, by adopting these eco-logistics strategies, you are preparing your company for the future.
Takeaway
Adopting green logistics could bring substantial gains to your business. It enhances your brand image and reputation, brings in potential partners, and gives you a competitive advantage, all of which could help you with your sustanability goals and long term committments to protecting the environment.
As for logistics service providers, adopting sustainable measures leads to considerable savings. Which is a win-win situation for the environment, the people, and the logistics industry.
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