Can e-commerce supply chains ever be sustainable?

The pandemic and its impact on demand for parcel shipping has shone a spotlight on sustainability.

In the last twelve months, we have seen e-commerce deliveries soar due to the shift to online shopping during the Covid-19 pandemic. However, there continue to be concerns about the environmental impact of e-commerce supply chains.  During a recent webinar hosted by Logistyx Technologies, one member of the audience asked, “With the higher volumes of boxes used in parcel shipments, what is the potential impact on the environment?”  By Ken Fleming, President, Logistyx Technologies.

This is such a great question.  As an industry, we know we need to get better at addressing sustainability.  We have been talking about it for some time, and significant steps have already been taken to reduce the environmental impact of parcel shipping, but the pandemic and its impact on demand for parcel shipping has put sustainability directly into the spotlight.

Parcel consolidation and shipment planning to avoid ‘rush orders’ are two simple solutions, but packaging options are also a huge factor.  Too often we ship air – we have probably all received a huge box containing a small product and lots of filler.  Right sized packaging is a growing trend: minimising wasted space whilst still protecting the contents of the parcel.  As carriers move towards charging based on the size and not just weight of the consignment, this also helps shippers cut delivery costs.

The scarcity of ‘beige gold’

Cardboard is probably the most popular recyclable or reusable packaging, but one consequence of the huge rise in online shopping and parcel shipping in the last 12 months has been a cardboard shortage – leading to the coining of the term ‘beige gold’.  Cardboard has been in huge demand since the beginning of the pandemic, and staff shortages in the paper recycling industry – a key component of cardboard – have only exacerbated the pressure.   Some companies have had to switch to non-branded packaging due to delays in sourcing their own bespoke boxes.

We need to look at whether, as an industry, we can make more use of recycled packaging materials or re-useable cartons.  Of course, this brings its own issues: it may be greener to re-use packaging, but cardboard becomes less sturdy the more it is used, which may lead to increases in damage in transit.

If you are going to reuse packaging, there are alternative materials with greater durability, that can be cleaned if necessary and reused again and again, until they are finally recycled. And it has been calculated that switching from single-use packaging to Returnable Transit Packaging made from recyclable plastic can provide CO2 reductions of approximately 50% per single product movement when compared to cardboard.

The decision whether to use returnable packaging will be influenced by who the end customer is. It is likely to be easier and more feasible to implement when shipping to business users rather than directly to consumers, as businesses will be open and able to return the packaging at the time of the delivery.  It may be worth considering that from 1 January 2020, reusable packaging (excluding bubble wrap and cardboard boxes) requires an import or export declaration due to Brexit.

Another area ripe for consideration is whether some (boxed) goods can be shipped without additional cardboard packaging at all.  Is this something consumers want?  Is the increase in potential damage in transit offset by the reduction in cost from removing the additional packaging? As an industry, we need to work harder to explore questions such as these.

Increasing transportation efficiency

Transportation efficiency is the second key to addressing sustainability goals.  Consolidating shipments that are going to the same place allows for a reduction of corrugation and packing materials.  It can be easier said than done, but transportation management software for parcel shipping can help companies identify opportunities to make greater use of this option.  The ‘same place’ can vary.  It may be a B2B distributor sending multiple orders to the same company – or to different recipients within the same company – where the shipments can be consolidated, and the orders dispersed to different employees upon receipt.  Alternatively, it may involve using break bulk to ship cross border as a consolidated shipment before onward delivery to the final destination.

Selecting a shipping partner and mode that minimises the impact on the environment also plays a role in increasing sustainability.  For example, working with a range of carriers, couriers and transport modes gives shippers the ability to select the ‘right’ way to ship any particular package in order to minimise journeys, distance covered and carbon impact.  Parcel transportation management technology can be configured to automatically select the most sustainable mode and carrier partner for a particular order, based on pre-selected metrics.

The role of technology is growing. Hermes UK is currently trialing a sustainable last mile delivery service, which coordinates traditional delivery vans with pedestrian couriers and uses software to identify safe locations for drivers to park within walking distance of multiple delivery addresses. From there, the final leg of the journey is completed on foot as couriers make deliveries to a mix of high-rise, business and residential buildings.

Slower tends to be greener

In the e-commerce space, faster delivery and initiatives such as a one-hour delivery window are commonly used to drive sales, yet we are seeing a growing demand for slower logistics services with reduced environmental impact.  Consumers are realising that faster doesn’t always equal better, and with more of us now working from home, we are less likely to require a one- or two-hour delivery window.  Slower delivery tends to be greener.  While sending shipments by road is slower, it has a lower impact on carbon footprints than air transport (where applicable).  And, of course, waiting a little longer so vans are going out fully filled is simply more sustainable.

For consumers, sustainability has many dimensions: the choice of the raw materials and where they are sourced; factory locations; how goods are manufactured, packaged, and transported; and recycling policies.  When developing sustainability in the supply chain, we need to look at all elements of reducing environmental costs and waste.  Much of the time, it is the aggregation of many small steps that counts, and often by improving transportation efficiency, technology can help e-commerce shippers take these steps at scale every day.

To learn more about Logistyx’s leading transportation management solutions for parcel shipping, visit www.logistyx.com.

To download our FREE white paper on Seven Logistics Trends that will radically change the Manufacturing Industry in 2021 click here.