Sustainability, A Logistics Requirement

April 22, 2021


Sustainability is now becoming a consideration when businesses choose logistics partners. “Everything that we do now, every contract that gets reviewed, has a sustainability focus in it. It’s not just about price, and it’s not just about the payment terms or supply security. It’s really got a whole focus of sustainability in it,” wrote Tony Milikin, VP of Procurement of AB InBev in the company’s sustainability report.

Indeed, according to an MIT sustainability study, this year will be one in which supply chain redesigns will incorporate sustainability. Among the top environmental goals according to the study is reducing carbon emissions.

Carriers are investing heavily in sustainability

According to UPS’ annual sustainability report, the parcel delivery provider noted that it plans to source 40% of ground fuel from low carbon or alternative fuels by 2025. Additionally, they invested in electric vehicle (EV) maker Arrival and will buy 10,000 of its EVs to add to the UPS fleet in North America and Europe, with vehicle delivery from 2020 to 2024. UPS has also been working with Workhorse to develop an electric transport vehicle.

In March, FedEx announced that it plans to be carbon-neutral in its global operations by 2040. As part of the announcement, FedEx will replace its parcel pickup and delivery fleet with zero-emission electric vehicles.

In January, GM announced that FedEx Express would be the first customer of its new business, BrightDrop, centered around EVs. FedEx will receive 500 of the company’s electric light commercial vehicle, the EV600, later this year. In 2018, FedEx Express announced it would add 1,000 all-electric delivery vehicles manufactured in China for operation in California.

Meanwhile, Amazon is already employing electric vehicles for its deliveries. Beginning in February, Amazon started using its electric Rivian delivery vans for deliveries in Los Angeles. Amazon then expanded the delivery region to San Francisco in March and just this week, Amazon deployed the electric vehicles in Tulsa, Oklahoma. According to Amazon, it will have a total of 10,000 Rivian delivery vans operating as early as next year.

The Last Mile

According to a World Economic Forum (WEF) report, demand for last-mile services is expected to grow by 78% globally by 2030. Furthermore, the report notes that the number of delivery vehicles in the top 100 cities globally will increase by 36% until 2030. As a result, emissions from delivery traffic will increase by 32%, and congestion will rise by over 21%. Electric vehicles that FedEx, UPS, and Amazon are introducing into their fleet will help reduce emissions.

Micro-fulfillment facilities are also doing their part. According to an Accenture study, the last-mile supply chain made possible by local fulfillment centers could lower last-mile emissions between 17 and 26% through 2025.

A study from Coyote Logistics found that 81% of shippers surveyed are more focused on sustainability today than they were three years ago, driving measurable gains for these companies. In addition, 84% of survey respondents were more likely to base a purchase decision on a company’s sustainability practices.

Sustainability is the future of the business world.

According to Environmental Defense Fund, 7 in 10 C-suite leaders and VPs are feeling pressure from customers and investors to make sustainability a strategic priority, 8 in 10 feel pressure from regulators, and more than 9 in 10 say consumers will likely hold them accountable for their environmental impact.

The importance of reducing the environmental impact of businesses will only continue to increase. Businesses and logistics providers alike are incorporating sustainability best practices into their supply chains which in turn will aid President Biden's call to action to cut carbon emissions by 50% by 2030 announced today.

 


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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Sustainability, A Logistics Requirement

April 22, 2021


Sustainability is now becoming a consideration when businesses choose logistics partners. “Everything that we do now, every contract that gets reviewed, has a sustainability focus in it. It’s not just about price, and it’s not just about the payment terms or supply security. It’s really got a whole focus of sustainability in it,” wrote Tony Milikin, VP of Procurement of AB InBev in the company’s sustainability report. Indeed, according to an MIT sustainability study, this year will be one in which supply chain redesigns will incorporate sustainability. Among the top environmental goals according to the study is reducing carbon emissions.

Carriers are investing heavily in sustainability

According to UPS’ annual sustainability report, the parcel delivery provider noted that it plans to source 40% of ground fuel from low carbon or alternative fuels by 2025. Additionally, they invested in electric vehicle (EV) maker Arrival and will buy 10,000 of its EVs to add to the UPS fleet in North America and Europe, with vehicle delivery from 2020 to 2024. UPS has also been working with Workhorse to develop an electric transport vehicle. In March, FedEx announced that it plans to be carbon-neutral in its global operations by 2040. As part of the announcement, FedEx will replace its parcel pickup and delivery fleet with zero-emission electric vehicles. In January, GM announced that FedEx Express would be the first customer of its new business, BrightDrop, centered around EVs. FedEx will receive 500 of the company’s electric light commercial vehicle, the EV600, later this year. In 2018, FedEx Express announced it would add 1,000 all-electric delivery vehicles manufactured in China for operation in California. Meanwhile, Amazon is already employing electric vehicles for its deliveries. Beginning in February, Amazon started using its electric Rivian delivery vans for deliveries in Los Angeles. Amazon then expanded the delivery region to San Francisco in March and just this week, Amazon deployed the electric vehicles in Tulsa, Oklahoma. According to Amazon, it will have a total of 10,000 Rivian delivery vans operating as early as next year.

The Last Mile

According to a World Economic Forum (WEF) report, demand for last-mile services is expected to grow by 78% globally by 2030. Furthermore, the report notes that the number of delivery vehicles in the top 100 cities globally will increase by 36% until 2030. As a result, emissions from delivery traffic will increase by 32%, and congestion will rise by over 21%. Electric vehicles that FedEx, UPS, and Amazon are introducing into their fleet will help reduce emissions. Micro-fulfillment facilities are also doing their part. According to an Accenture study, the last-mile supply chain made possible by local fulfillment centers could lower last-mile emissions between 17 and 26% through 2025. A study from Coyote Logistics found that 81% of shippers surveyed are more focused on sustainability today than they were three years ago, driving measurable gains for these companies. In addition, 84% of survey respondents were more likely to base a purchase decision on a company’s sustainability practices.

Sustainability is the future of the business world.

According to Environmental Defense Fund, 7 in 10 C-suite leaders and VPs are feeling pressure from customers and investors to make sustainability a strategic priority, 8 in 10 feel pressure from regulators, and more than 9 in 10 say consumers will likely hold them accountable for their environmental impact. The importance of reducing the environmental impact of businesses will only continue to increase. Businesses and logistics providers alike are incorporating sustainability best practices into their supply chains which in turn will aid President Biden's call to action to cut carbon emissions by 50% by 2030 announced today.  
ABOUT SPEND MANAGEMENT EXPERTS Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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