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
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
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.
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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