E-Commerce and Sustainable Last-Mile Delivery Options 

Government bodies and consumers are increasingly more concerned with their impact on the environment. In this QAD Precision Report we look at the importance of sustainable last-mile delivery as e-commerce continues to grow. 

Around the world, government bodies and consumers are becoming more and more concerned with their impact on the environment. 

The European Commission, the EU executive body, recently launched a major climate plan. This plan outlines how the bloc's 27 member countries can meet their environmental goals. EU members have been tasked with reducing net greenhouse gas emissions by 55 percent from 1990 levels by 2030. This is a step towards achieving the EU’s target of "net zero" emissions by 2050.  

Consumers are also becoming more aware of the choices they make and their impact on the environment. As a result, carbon-neutral delivery is becoming increasingly important to consumers. 

The IPC Global Postal Industry Report 2019 examined consumers’ views on sustainability when engaging in e-commerce cross-border. The survey revealed 45 percent of cross-border online shoppers want the delivery process to be carbon-neutral, of which 28 percent strongly agree. Furthermore, 47 percent of respondents said they would be prepared to receive their parcel a few days later to lessen the environmental impact. In addition, the survey revealed 66 percent of consumers want packaging of their online purchase to be recyclable. 

E-commerce companies need to respond to these concerns in order to meet customer expectations. This is especially important as e-commerce demand continues to grow. 

E-Commerce Growth and the Environment

Last year, when Coronavirus restrictions shut down physical stores, e-commerce volumes skyrocketed. Despite the reopening of physical retail stores around the world, demand for online shipping is still accelerating. 

In the United States, the National Retail Federation (NRF) has predicted non-store and online sales to grow between 18 percent and 23 percent in 2021 over 2020. According to the NRF, retail sales could reach between $4.44 trillion and $4.56 trillion in 2021. It is expected that non-store and online sales will account for between $1.09 trillion and $1.13 trillion of total retail sales. 

Logistics company DHL said it handled 33 percent more shipments per day in the first quarter of 2021 compared to the same period last year. This growth was seen in both business-to-business and business-to-consumer e-commerce orders and in the US alone, shipment volumes expanded 41 percent during the quarter. 

This e-commerce demand has resulted in an increase in congestion and air pollution in cities and urban areas around the world. Seattle’s Department of Transportation estimates that 60 percent of the city’s greenhouse gas emissions come from transportation. In Europe, urban transportation of goods is responsible for up to 30 percent of CO2 emissions in European cities. Transport for London has launched a freight innovation challenge to tackle London’s air pollution and road congestion due to a rise in freight movement in the city. 

It is becoming necessary for e-commerce companies to offer more sustainable deliveries to their customers. One way this can be achieved is by leveraging carriers that invest in decarbonizing their services. 

Greener Delivery Options

More and more carriers are moving towards decarbonising their services and fleets and investing in delivery technologies. 

In the US, DHL eCommerce Solutions relaunched Expedited Max as a 100 percent carbon-neutral service. This means all Expedited Max CO2 emissions are being offset as standard. The move is a result of DHL’s Sustainability Roadmap that was launched recently and is part of the group’s Environmental, Social & Governance (ESG) goals.

Many carriers are adopting the use of electric-vehicles for last-mile delivery to reduce congestion while also offsetting emissions. DHL recently announced plans to electrify 60 percent of its last-mile delivery vehicles by 2030. It also plans to use sustainable modes of delivery such as bicycles, e-bikes, and parcel lockers. These green delivery options are increasingly important to consumers.  

DPD recently announced a partnership with the electric vehicle (EV) tyre maker ENSO. Together they plan to conduct road trials of a new tyre for commercial EVs that reduce air and microplastic pollution.

DPD Ireland reported that it is investing €2m ($2.4 million ) to decarbonize its vehicle fleet and aims to acquire 100 new electric vehicles by the end of 2022. In 2021, the delivery company deployed 30 new electric vans and is expected to deliver its one millionth parcel using electric power in the next 18 months. Last year, the company delivered 80,000 zero-emissions parcels in Dublin and aims to have 250 electric vehicles in operation on Irish roads by 2025. 

In the UK, DPD announced that it has switched its fleet delivering parcels in Oxford to be fully electric, becoming DPD’s first all-electric city. Nine further ‘green cities’ in the UK are being confirmed by the end of 2021.

E-Commerce Delivery Strategy

It is necessary that e-commerce companies adopt an e-commerce delivery strategy that takes customer expectations into account. This includes consumer preferences for more sustainable parcel delivery. Today, an e-commerce delivery strategy should support sustainability and reduce waste.

To meet consumer expectations, enterprises can leverage carriers that invest in making their services more sustainable. This includes using electric vehicles for last-mile delivery. In urban areas, bicycle couriers can be added into the carrier mix for small parcels to reduce congestion and air pollution. With multi carrier shipping software, retailers and other shippers can harness a multi carrier network. 

Companies can save money by leveraging local carriers for last mile delivery when shipping internationally, while also reducing their impact on the environment.

Furthermore, e-commerce companies should offer customers greener options such as buy-online-pickup-in-store and collection points. Additionally, enterprises can save money by allowing customers to choose minimal packaging. 

Conclusion

As e-commerce continues to grow, it is important for shippers to consider consumers' concerns about sustainability and the environment when online shopping. Shippers can leverage carriers that invest in greener delivery services and adopt an e-commerce delivery strategy that offers more sustainable options. 

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Further Reading

THE GREEN LAST MILE

LAST MILE DELIVERIES: OPPORTUNITIES, CHALLENGES AND TECHNOLOGY 

UNDERSTANDING HOW PACKAGE CONSOLIDATION WORKS