Delivering on green promises: the road to sustainability

DELIVERING ON GREEN PROMISES

the road to sustainability

As retailers seek to address their Scope 3 emissions and meet changing consumer expectations, sustainability has joined speed, cost and reliability as key measures of competitiveness for logistics providers. Yet, for the logistics industry, there’s a dilemma at the heart of sustainability programmes.

‘Consumers say sustainability is important but they will not agree to a €1 surcharge to pay for it,’ notes Luke Lloyd, Head of Markets & Sustainability at International Post Corporation.

With limited opportunities to pass on the costs of sustainable initiatives, companies operating in this low margin sector are feeling the squeeze, making it important to find smarter ways of working to cut both costs and emissions.

The solution to this dilemma, according to Sanae Murschel, Managing Director of International Sales, Colissimo, La Poste Group, is to focus on reducing costs through optimised routing, consolidating and re-engineering networks - and with that comes a smaller CO2 footprint.

Sometimes, this means rethinking existing ways of working. In 2021, for example, the group moved from pallet loading to stacked bulk in loose load in the vehicles. ‘It means we stopped transporting air and optimised the capacity,’ says Murschel.

At EVRi, which has set a target to be net zero by 2035, a key change has been to sit sustainability within its procurement team, forcing teams such as finance and operations, to engage with a transformation programme they might otherwise see as peripheral.

[Embedding sustainability within procurement] seems an odd choice, but it has accelerated our progress and enabled us to focus on how we use our actions in sustainability to drive enhanced profits for the business, which then changes the calculus on how far we can go and the types of investments we can make.

David Saenz
Chief Commercial Officer, EVRi

EVRi’s approach has been to adopt a hyper-centralised first and middle mile, using the absolute minimum number of hubs and depots to cover an entire geography, along with a hyper-decentralised final mile. There’s no escaping that road haulage businesses are polluting businesses, says Saenz, and there’s no quick fix.

‘There’s no easy way to do this other than going line by line through every single activity in the business to see what you can change,’ says Saenz. This includes investing in out of home (OOH) locations to reduce final mile journeys and balancing efficiencies in labour planning and EV planning for reduced CPUs. ‘We’ve had better costs than we expected in our original business case,’ says Saenz.

The group has already reduced its absolute operational carbon by over a third since its 2020/21 baseline² but these were the easy wins and there’s more to come. ‘Solving this requires real innovation,’ says Saenz.

Innovation is key. Here’s UPS’s Director of Public Affairs, Lars Purkarthofer, talking about the UPS approach to sustainability innovation.

Electrification of fleets is key, although EVs still remain an expensive option in many countries.

‘In Norway, where the EV market is quite advanced, the TCO (total cost of ownership) has been positive for a number of years, which is a cause for optimism,’ says Colin Campbell of Posten/Bring.

Electrification is more of a challenge for heavy goods vehicles; charging times alone are not compatible with long distance routes.

‘When it comes to long distance transport, utilisation is king,’ adds Lars Purkarthofer, Director of Public Affairs at UPS, pointing out the European Modular System of 25 metre trucks with their higher volumes can result in almost 30% lower energy consumption than conventional trucks.³

‘Our business model relies on larger vehicles so we can mitigate the traffic and size of our fleet by deploying optimised larger vehicles,’ Purkarthofer. ‘This also increases the productivity of our drivers in a holistic way, that includes working methods as well as equipment.’

Productivity is also boosted by the company’s On-Road Integrated Optimization and Navigation (ORION) AI-powered dynamic routing tool, which has saved UPS approximately 100 million miles and 10 million gallons of fuel per year, significantly reducing its environmental impact and operational costs. Indeed, some estimates say it may save as much as $300 million - $400 million a year.

For aviation elements of the supply chain, then sustainable aviation fuels are currently the only viable alternative but with big concerns about availability of supply.

‘It’s going to be absolutely necessary that we implement an international flex mechanism, a book and claim system, so that market ramp up can really happen on a global scale,’ says Lars Purkarthofer.

Indeed, it’s clear that not only will collaboration and co-operation between carriers, customers and couriers be essential but so too will co-operation with policymakers and regulators to find solutions to these global-scale problems.

‘Many of these solutions require government subsidies and, in some countries, the political climate is not so easy right now,’ says Luke Lloyd, Head of Markets & Sustainability at International Post Corporation.

As this debate heats up, get the hottest takes from those on the logistics frontline at Leaders in Logistics 2026.

http://www.evri.com/environment-social-and-governance/environment
Research from ACEA found that three high-capacity vehicles can replace six regular trucks, reducing CO2 emissions by up to 27%. (https://www.acea.auto/press-release/truck-makers-call-for-eu-wide-introduction-of-high-capacity-vehicles-to-bring-down-co2-emissions/)