At the start of 2020, the world was plunged into the new reality of national lockdowns. Although this new normal was accompanied by uncertainty and a huge shift in our usual behaviour, some positivity was felt. Daily global CO2 emissions decreased by 17% by early April 2020 compared with the mean 2019 levels. The world was able to take a breath as a monumental reduction in emissions were recorded. This prompted a business priority shift, particularly in certain industries, to push sustainability to the front of their models.
A second notable shift was seen in how consumers were receiving their products. Home deliveries were increasing, with a 13% increase in the number of parcels shipped overall, meaning leaders in logistics were bracing for a busy year. It is interesting to hear how these companies navigated the increased demand whilst maintaining their sustainability pledges.
Creating a holistic sustainable business model
In the Leaders in Logistics panel, “From Warehouse to Doorstep: Creating a Holistic Sustainable Business Model” you get exactly that. The event was a platform for industry heavyweights and key decision makers to come together to discuss future strategy in an ever-changing and dynamic post and parcel sector. The panel members were guided through a series of conversations regarding low emission vehicles, improved route optimisation, consumer demands for environmental options and sustainable packaging. How are these leaders moving forward with their sustainability goals and what are their challenges? Meet the panel:
Juliette Foster – Journalist and Broadcaster who lead the panel
David Saenz – COO at Stuart, the leading on-demand delivery solution, revolutionising the future of urban logistics
Fredrik Lindqvist – Senior Vice President at Posten Norge, a Nordic logistics and postal group, delivering complete solutions within within postal services
Martin Starup – Senior Business Development Executive at Lyngsoe Systems, who are a world leader in logistics solutions across the customer supply chain
The discussion was split into two sections. The first section targeted four main points, which were addressed by Juliette to the panelists in turn. The second section was an open Q&A, where the audience asked questions with the panelists jumping in to answer.
Let’s start by summarising the first section.
Will lockdown accelerate the drive towards low emission vehicles in urban centers?
In short, yes. The panel agreed that lockdown will accelerate the process that was already on-going prior. The huge reduction in emissions seen by major cities around the globe during the lockdown has been an eye-opener for a large portion of the population.
However, the panel also recognised that it was a fine balance between meeting your sustainability goals in critical periods such as Covid-19 lockdown periods, whilst also maintaining a high level of service to end-customers. This presents some challenges, which the panelists diverted to. The main challenges are innovation; consumers onus to pick sustainable delivery options at checkout; and finally smart legislation and investment from the government. With initiatives like all petrol and diesel cars being banned from 2030 and the higher congestion charges within cities like London, it is clear the UK government is taking steps in the right direction.
With all challenges come opportunities, and the panel were excited to share their proposed plans. They were in agreement that there are two main opportunities to meet these new expectations.
Fleet side: The most obvious being introducing more eco-friendly vehicles into the fleet. As David, Stuart’s COO, stated, Stuart is putting a huge effort and focus to use environmentally friendly vehicles, which was their model from day one.
Technology driven: This is particularly important for the last mile. Using more accurate dispatch technology can have a huge impact by maximising occupation rates, meaning less unnecessary vehicles are on the road.
How can improved route optimisation contribute to sustainability?
Martin, Senior Business Development Executive at Lyngsoe Systems, started by discussing the easiest way to reduce CO2 emissions caused by delivery vehicles was by sending less vehicles into the city centre, as previously mentioned by David. This is achieved by utilising and optimising the current fleet. Martin stated, “utilisation of vehicles on average today is between 60-65% of its capacity, which leaves room for improvement”. This is the case for both the line-haul and the milk runs. The use of real-time data is vital, including load status and data from the vehicles driving patterns. This data can be used to improve the planning of vehicles needed to go into the city. As you maximise occupation rates by keeping existing couriers busy throughout the day at a steady basis, the fewer vehicles you need on the roads - contributing to urban sustainability.
Will couriers have to react to customer demands for more environmental options?
It was mentioned that although demand for faster, more efficient delivery options from customers has increased, particularly due to lockdown and Covid-19, the customer also wants environmental options. This is something Stuart has worked into its delivery model from day one, with David sharing that investment and innovation has been pushed into its store-to-home model. He stated, “why bring the same goods back into the city a second time on a given day when they are already right there, next to the consumer?” The ship-from-store model therefore makes a huge positive impact to sustainability, which the rest of the panel agreed with.
How can the industry contribute to improvements in packaging and warehousing?
Juliette, the moderator, mentioned that consumers in fact do not like it when their products arrive over packaged, meaning consumers are concerned with how sustainable packaging is. What can logistics leaders do to try to improve their clients packaging and warehousing? Frederik, Senior Vice President at Posten Norge, believes that logistics providers can add value to their customers by being advisors on how to package correctly with the most efficient packaging and cost. Frederik told the panel that next year, Posten Norge are launching a fulfillment service, allowing an end-to-end value chain, allowing control over the packaging and warehousing. As well as ‘efficient’ packaging, reusable materials could also be used. This is more complex as the material has to last over a long period of time and isn’t always cost effective.
After an engaging panel debate, questions were opened up to those tuning in and the participants were asked to dive deeper into various facets of the debate so far.
Questions from the audience to the panel
Q: What kind of optimisation tools do you think are relevant to optimise transportation and reduce CO2.
David, Stuart: “When Stuart think about optimisation, they think of it from a number of variables. First is transport type. Using the transport type that will yield the lowest, ideally zero, carbon emissions to complete the delivery. Second, in being able to assign to the carbon neutral transport types first in real-time. This means being able to put as many parcels together in real-time, pulling in pick-up point location, drop-off point location, vehicle capacity constraints, SLAs to the retailer and end-customer promise simultaneously, and deciding from this data which courier is best suited for the job. By doing this you keep to your promises in the most optimised way possible. At Stuart’s core, making these decisions as quickly and as accurately will lead to reaching not only sustainability goals but also meeting customers SLAs and end customers needs.”
Frederik agreed with David, confirming that optimisation tools will be the core of logistic companies in the future.
Q: Do retailers really care about the environment? More and more offer free same day delivery which encourages clients to place orders without stress. Do you believe this will change without setting premium service prices for the same day?
David, Stuart: “It depends on the retailer, but you can definitely see clear commitments from really important retailers such as Nespresso and Zara. Many of the biggest retailers are fundamentally committed to it - this doesn’t just include what they’re willing to pay for the logistics services they purchase, but also their willingness to consider different options and work on new offers to link their marketing campaigns to their sustainability goals, which helps reinforce the importance of these in the end-consumers mind.”
The panel provided a clear and concise summary of their sustainability strategies moving forward. There is a particular urgency for improved technology via innovation to optimise current delivery operations, whilst also implementing large scale, eco-friendly transport into existing fleets. Although for most, the uncertainty caused by the Covid-19 crisis has been negative, it is exciting to see that one huge positive has emerged - that is the importance for leaders - and key decision makers in the logistics sector - to appoint sustainability as a priority.
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