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Green Logistics: The Challenges and Opportunities

Consumer demand, an accessibility and availability of novel technologies, and internal pressures to adapt and become more progressive have all encouraged logistics service providers to rethink, evaluate, and improve their operations with sustainability and environmental awareness in mind.

This change has been gradual, the momentum behind it is still building and there is still a long way to go, which is why we have decided to talk about the ongoing changes, challenges and opportunities for logistics operations looking towards the future.

Firstly, we should touch on the basics of green logistics, environmental sustainability for logistics service providers and what they mean for the future of the logistics and transport industry.

What is Green Logistics?

Green Logistics is the movement towards addressing climate change from an Industry point of view. It is tying logistics and the environment together, and balancing the economy with the planet, resulting in more sustainable processes, policies, and practices.

The question is how to efficiently and productively meet demand, help businesses grow and stay economically viable, whilst ensuring environmentally sustainable practices and policies are met.

Reverse logistics, concerning both recycling and the consumer demand for quicker and more convenient purchase and return options, has also been a major topic of discussion when addressing sustainability in logistics.

This feeds in to a larger challenge; consumer demand. Consumer demand has put more pressure on logistics companies to offer more flexible, efficient and convenient services. Through trying to meet these expectations and demands, logistics operations have become far more complex, and balancing environmental sustainability with them is only complicating operations further.

What is convenient for the consumer is not so much for logistics and transport operations, and this is another challenge that Green Logistics aims to address.

Our last article discussed urbanisation, and how growing city populations are impacting the flow of goods and services in densely populated areas, along with the environmental and logistical implications of handling these complex adaptations and processes.

This article aims to focus on the challenges and opportunities for logistics operations who are prioritising a greener stance, along with the barriers that have slowed the progression towards more environmentally sustainable ways of working.

Why have Logistics Operations seen a slow transition towards Greener practices?

Logistics has seen a slow move towards more sustainable practices. This slow transition is because of a few key reasons.

Firstly, customers are, or have not been, interested in greener solutions. Getting businesses interested in adopting a greener stance is difficult because it comes down to profitability for a lot of companies. Adapting an operation so it is more environmentally friendly usually means a rise in costs of operating, at least for a period of time, and these heightened costs will be passed down to the customers of these greener operations. For this reason, it is not a business opportunity, and profits are prioritised.

On a governmental level, there are a lack of policies for how Logistics service providers need to operate to meet environmentally friendly, or sustainable standards. This lack of legislation means LSP’s are required to change their operational processes and so operations are free to continue as they have been for decades. There isn’t a lack of available technologies that enable these operations to work more efficiently and cleaner, but there is a low number of adopters.

Despite these reasons for such a slow transition, there is a growing need for investment to become future oriented and concerned with the planet’s health.

Green Logistics: Opportunities and benefits

Now that we’ve outlined what Green Logistics is, why it is important to address now, and why it has seen few adopters over the past few years, we are going to take a look at some of the opportunities and benefits that technologies enabling greater sustainable practices can bring to progressive Logistics Service Providers.

The first is resource efficiency. With novel technologies enabling logistics companies to control their operations without the use of paper, they can save huge amounts through a variety of processes. From admin and labour costs, to reducing manual error and subsequent duplication of efforts or delays, or more efficient and quicker deliveries which can result in surplus time which can be reinvested productively.

Companies can also save on fuel costs, reduce the distance their goods have to travel, and cut CO2 emissions whilst improving the customer experience by offering a more reliable and consistent service.

Furthermore, innovations in warehousing has seen businesses use space more effectively, leading to lower rent or utilities costs, as well as reduced energy consumption and a smaller carbon footprint. On top of these, using resources more efficiently and optimising inventory control using digital technology can result in less wastage, and a safer work environment for employees.

As we witness a growing emphasis on greener ways of working, potential customers are also looking to work alongside businesses that share their values and environmental policies, which means a progressive logistics operation can become a more attractive option for potential customers, leading to growth and expansion alongside an improved reputation.

As cities grow and become more densely populated, the complexity of their economic infrastructure grows as well, and it is more vital than ever for all Industries to consider investment now for the protection and preservation of our environment for future generations to come.

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