Sustainability in the Logistics Industry

An important role played by the logistics sector in driving greener and more environmentally responsible supply chain operations.

FREMONT, CA: The logistics sector serves as the vital system of the world economy, facilitating the movement, storage, and distribution of goods. However, it's worth noting that this industry, like many others, has been working actively to address its environmental impact. While logistics has historically contributed to greenhouse gas emissions, waste generation, and other environmental issues, the sector is increasingly embracing sustainable practices to mitigate its ecological footprint.

As the world's focus on climate change and environmental sustainability continues to grow, logistics companies are stepping up to play a crucial role in building a greener and more sustainable future.

One of the most pressing challenges the logistics industry faces in this regard is the reduction of carbon emissions. Transportation, particularly road freight, has been a notable contributor to greenhouse gas emissions, accounting for approximately seven per cent of global emissions. However, the good news is that sustainability has now become a fundamental aspect of every business operation, with the logistics sector playing a pivotal role in driving positive change within the economy.

Moving Towards a Greener Future

The logistics industry in India is anticipated to increase at a compound annual growth rate (CAGR) of 8.36 per cent, from $435.43 billion in 2023 to $650.52 billion by 2028. Players in the logistics sector must concentrate on sustainable practices to reduce their negative effects on the environment and provide cost savings as the sector expands.

Sustainable practices in the logistics industry can lower costs by 20–25 per cent, according to a National Productivity Council (NPC) study. The survey also highlighted the opportunity for companies to improve customer loyalty and brand perception by using sustainable logistics practices.

The logistics industry, given its energy-intensive operations such as transportation, warehousing, and distribution, does indeed exert a notable environmental footprint. However, there's a positive shift happening in recent years as companies actively seek ways to diminish their carbon emissions and embrace sustainable logistics practices.

Sustainability Strategies

Optimising Transportation Methods

In the logistics industry, one of the biggest sources of greenhouse gas emissions is transportation. Utilising eco-friendly transportation strategies, such as driving an electric or hybrid automobile, can considerably lower carbon emissions. Route optimisation and the use of multimodal transportation can also cut back on fuel usage and expenses.

Utilise Eco-Friendly Packaging

Styrofoam, plastic, and bubble wrap are all common packaging materials that dramatically increase waste production. Logistics companies can cut waste and advance a circular economy by adopting eco-friendly packaging materials like biodegradable or recyclable materials.

Embrace Flexi Warehousing

Operations related to warehousing affect energy expenditures and usage, notably in relation to cooling and lighting. Businesses can share warehouse space by employing a flexible warehousing model to help cut expenses and energy usage.

Emphasise Last-Mile Delivery

The last leg of the logistics chain, last-mile delivery, frequently necessitates the usage of fossil fuel-powered trucks. Utilising sustainable transportation alternatives like electric bikes and foot deliveries can lower carbon emissions.

Invest in Technology and Promote Sustainable Practices Across the Supply Chain

Technology may drastically lower energy consumption, labour expenses, and inventory losses. Examples include radio frequency identification (RFID), automated warehouse management systems (WMS), and route optimisation software.

The entire supply chain should adopt sustainable logistics practices. This includes pushing suppliers to use eco-friendly packaging and efficient delivery methods as examples of sustainable practices.

Businesses can gain a lot from implementing sustainable logistics practices, including cost savings and enhanced brand recognition. For example, switching to electric vehicles for transportation can save on maintenance and fuel costs, and streamlining warehousing operations can cut down on labour costs, energy use, and inventory losses. Moreover, implementing sustainable logistics procedures can assist companies in meeting consumer demand for eco-friendly goods and services, which can improve brand reputation and client loyalty.