Why carriers need to act on sustainability
- Written by Justin Dery, Chief Executive Officer - Asia Pacific at Doddle
The pandemic-induced growth of online shopping has meant that while parcel carriers are becoming more efficient and sustainable on a per-parcel basis, last-mile delivery as a whole is now responsible for more emissions than ever before.
McKinsey data suggests that consumers genuinely do spend more on ‘green’ products, so unsurprisingly retailers are looking for ways to highlight sustainability throughout the customer journey, making this a crucial requirement for delivery carriers in securing future customers. But how can they reconcile ever-increasing parcel volume with the need to be more sustainable?
Are EVs the sustainable answer?
As electric vehicles (EV’s) become more popular, major retailers and carriers are looking at how they can integrate them into their delivery networks. EV’s are sometimes described as ‘emission-free’, because they don’t emit any CO2 whilst driving - but not emitting CO2 while driving and being emission-free aren’t exactly the same thing.
EV’s do create emissions in their manufacture, and by the electricity demand created by charging. Still, if we compare them to petrol and diesel vehicles, electric vehicles will produce lower CO2 emissions across their lifetime, even if the electricity used to power them comes from fossil fuel generation.
So EV’s aren’t emission-free, but they’re a lot closer to that goal than their fuel counterparts. However, with operational costs and manufacturing delays, full electric fleets are a long-term goal that will take many more years to realise, and even longer to become anything like truly emissions-free.The biggest threat to last-mile sustainability is the increase in parcel volume: more parcels delivered means more miles on the road, increasing the emissions from carriers even if more of those miles are driven by electric vehicles. If carriers want to be truly sustainable, they need to cut down the number of miles and encourage greater consolidation of deliveries.
Other strategies for creating a more sustainable last mile
The need for fast ecommerce deliveries won't disappear overnight, but carriers can still seize opportunities to enhance their operations without compromising on speed or service quality. Offering out-of-home (OOH) delivery options allows carriers to consolidate parcels by dropping multiple orders at a single collection point, where customers then come to pick up their parcels at a convenient time. That makes the economics of same-day or next-day delivery a lot easier to achieve, as well as significantly reducing emissions. Giving customers green, fast and cost-effective options makes them much more likely to make sustainable choices.
To be confident in their sustainability metrics, carriers need to understand how customers access an out-of-home delivery location. Surveying customers allows carriers to understand what proportion of customers are walking, cycling, driving, or taking public transport as part of their pickup journey. Then they can use a model to estimate the emissions impacts of each transport method, to what extent these trips were made solely to pick up the parcel or as part of another trip they were already making, et cetera. In short, the method of travel the consumer uses makes a big difference to the overall sustainability of the delivery.
Most carriers are already using advanced algorithms to generate delivery routes that minimise mileage and reduce fuel consumption. However, more can be done to integrate these routing algorithms with OOH solutions. When missed deliveries occur, for example, a routing algorithm that understands the OOH network available to the carrier could re-direct all the failed parcels from one neighbourhood into a central PUDO location or parcel locker within that community, at the cost of one extra stop in the route, rather than simply letting the package travel back to the delivery hub and waiting to be re-delivered - a more expensive and emissions-intensive option.
Encouraging greener customer choices
Raising awareness among consumers is crucial in driving the demand for sustainable parcel delivery services. With customers more inclined to purchase sustainable goods and services, by providing transparent information about sustainability initiatives and carbon reduction efforts, parcel carriers can empower consumers to make informed choices and support clients that prioritise environmental responsibility.
Sustainability is becoming a crucial requirement for carriers and posts, and the onus is now on them to learn how to promote and turn their existing capabilities to their advantage. The easiest and lowest-cost solution most carriers have at their disposal is to increase the share of parcels being delivered into their existing out-of-home network, consolidating deliveries and reducing emissions.
Leveraging the sustainability benefits of out-of-home won’t just help secure partnerships with retailers, increasing delivery efficiency also drives down costs and helps to protect margins - a win-win situation that carriers can no longer afford to ignore.
