Matthew Robertson, Co-CEO NetDespatch, discusses the last mile delivery problem and how it could be more environmentally friendly:
As passionate climate activists like Greta Thunberg inspire Generation Z to fight for the future, an Amnesty International survey of 10,000 18 to 25 year-olds late last year found that 41% of them ranked global warming as the number one issue facing the planet. This unprecedented groundswell of concern looks set to change the way a whole generation approaches issues from plastic use and travel to diet and consumption levels in general. As the new generation comes of age, their preferences and purchasing power will start to have a big impact on business.
The issue of changing consumer habits is a challenge the retail sector has faced for some years. You only need to look at the high street, with record numbers of units standing empty, to understand the risks of failing to adapt. There is hope for the high street, however. 2020 will see the Government’s High Street Task Force and associated funds implemented and a shift is planned to tempt people back into town centres as a destination for experiences, not just product purchases. However, this evolution has been a long time coming and there have been high profile casualties along the way, showing that failure to spot the winds of change is a big risk.
So, given the rocketing profile of environmental issues, retail businesses need to respond or risk becoming out of touch with the new generation of customers. As part of that response it seems inevitable that the delivery industry will once again be asked to look at how it can become more environmentally sustainable and there are some encouraging answers on the horizon. Journey consolidation and smart routing for both delivery and returns, powered by AI, are promising more efficient, less polluting delivery options and we will likely see growing focus on this area as the year unfolds. And, as environmental responsibility is increasingly becoming a reputational concern, retailers and carriers alike are feeling the pressure to have sustainable advocacy in their business plan.
To this point, the International Post Corporation (IPC) has released the findings of its Cross-Border E-commerce Shopper Survey 2019, which revealed that an increasing number of consumers are demanding more sustainable delivery options. According to the survey, 66% of global consumers strongly agreed or agreed that they would like the packaging of their parcels to be recyclable and expressed a strong preference to receive parcels in cardboard rather than plastic. Furthermore, 45% of cross-border online shoppers would like the delivery process to be carbon-neutral. Interestingly, participants in the survey were also asked if they had ever paid extra for sustainable packaging when purchasing online. Only 1% had done this before, while 44% said they had never paid extra for sustainable packaging but were likely to do so in the future. This change from what shoppers do now to what they plan to do in future should be recognised by retailers as indicating a clear direction of travel towards sustainability.
Overall, this report highlights the importance to consumers in providing recyclable packaging and sustainable delivery and, while many of us might think that online shopping has a lower carbon footprint than traditional in-store shopping because of more efficient logistics, this is not necessarily the case. The actual determination of the environmental impact of e-Commerce is complicated because of the range of considerations, including local transport practices, and the type of delivery vehicles used by carriers, among others. Likewise, the high rate of returns increases the environmental impact. The consequences to the environment of returns is that they involve double transportation and may require disposal rather than resale. Further, special sale events such as Singles Day, Black Friday and Cyber Monday place a burden on the environment due to the intense amount of packaging, shipping and delivery in a relatively short time, plus the disposal of serviceable items replaced with bargain-priced goods.
While shoppers often select the quickest delivery methods at the lowest price point, some recent studies indicate that, when made aware of delivery options with a lower environmental burden, some shoppers would choose that method. Likewise, leading e-Commerce merchants such as Amazon, Alibaba, and Zalando are making efforts to decrease the burden their businesses place on the environment through different aspects such as logistics efficiencies, delivery with electric vehicles and use of recycled packaging materials.
I was reading about one such company based in the West Midlands, the Bevan Group, that is tackling this problem head on. This organisation has just signed a partnership agreement with electric vehicle conversion specialist Voltia under which it has been awarded a licence to assemble and market the zero-emission Nissan-based vehicle in Great Britain and Ireland. The Nissan is ideally suited to ‘last mile’ delivery work in towns and cities. This means that not only will local production and distribution of Voltia’s electric vans be more environment-friendly, because these vehicles won’t be shipped in from abroad, thereby supporting the drive in many cities to reduce emissions, but this partnership will also enable a smoother process for delivery and potentially make these vehicles more accessible.
I would be really interested to hear about other ways that the logistics industry is tackling environmental issues as without a doubt we are seeing more delivery vans on the road now than ever before. I am sure that more questions will be raised around the impact this will have in the months and years to come.
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