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What’s next for sustainability and green logistics?

illustration of a person standing next to a large monitor with a flower on the screen representing sustainability

It’s 2022 and going green is all the rage among consumers and companies. Many consumers are actively seeking out products and brands that resonate with their values surrounding social, economic, and environmental awareness. They’re also participating in the so-called “circular” economy practice that advocates for reducing, reusing, and recycling materials to lower our collective carbon footprint. But the U.S. has a long way to go: as recently as 2019, the EPA reported the national recycling rate was only 32%.1

Global research conducted by the Economist Intelligence Unit (EIU), commissioned by the non-profit World Wildlife Fund, shows a staggering 71% rise in the popularity of searches for sustainable goods in the five-year period from 2016 through 2020, and interest in sustainable products has continued throughout the COVID-19 pandemic.2

Among the leading brand practices that consumers value most are waste reduction, reducing the carbon footprint, and sustainable packaging, according to a 2021 survey by Deloitte in the eco-conscious U.K. The survey found about a 50/50 split between those willing or not willing to pay more for environmental and ethical brands.3

Other surveys have found an even greater tendency for consumers to pay more for sustainable products, and at the employer level, sustainability practices are increasingly linked to employee retention.

Across much of the world, corporations are focused on creating or enhancing environmental, economic, and social governance (ESG) policies, with sustainability initiatives leading the charge. For those not familiar with the term, ESG criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.4

Regardless of the audience—whether investor, employee, or consumer—the public at large is putting pressure on organizations to be good stewards of the environment. Reducing or offsetting carbon emissions and working toward carbon neutrality—a state of net-zero carbon dioxide (CO2) emissions—in order to mitigate and slow down climate change has become a vital mission.

The transportation and logistics sector is one of the biggest contributors to global CO2 emissions, contributing around 24% of global CO2 emissions, according to the CarbonCare emissions calculator organization. By 2050, the European Environment Agency expects global logistics to account for up to 40% of global carbon dioxide emissions if strong and effective actions are not taken.5

Transportation carriers and 3PLs are taking action

Transportation carriers and asset-based 3PLs are taking a multi-pronged approach to drive improvements in sustainability and reduce their carbon footprints.

In the 2022 26th Annual Third-Party Logistics (3PL) Study, the leading areas cited by companies where they’re making progress around sustainability were warehousing, transportation, sourcing and procurement, sustainable sourcing, and supplier management. Within transportation, sustainability initiatives noted in the study were those involving fuel efficiency, capacity utilization, electric vehicle technology, and improved vehicle scheduling and management.6

Last year, FedEx announced its goal to achieve carbon-neutral operations worldwide by 2040, committing more than $2 billion over several years to support sustainable initiatives across its air and ground fleet, and facilities.

Similarly, Amazon has pledged to reach net-zero carbon emissions by 2040, with the goal to power its operations with 100% renewable energy by 2025.7 The ecommerce giant ordered over 100,000 fully-electric delivery vehicles from Rivian, and plans to invest $100 million in reforestation projects around the world. Amazon will take delivery of the first 10,000 vehicles units are due by the end of 2022, with the remainder by the end of the decade.8

Vehicle modernization is also among the many broad sustainability initiatives at the U.S. Postal Service (USPS) which delivers 43% of the world’s mail volume, and considerable portions of U.S. e-commerce deliveries, including last-mile deliveries. According to Statista, in 2020, USPS was the preferred carrier by the top 500 e-commerce players.9

While only a small portion of the massive USPS fleet currently runs on alternative fuels and electrification, the carrier is planning to modernize in a multi-billion-dollar ten-year effort to replace its fleet of more than 230,000 vehicles.10

At the 3PL level, retail logistics and e-commerce fulfillment providers like Ryder E-commerce by Whiplash are undertaking a number of sustainability initiatives including operating SmartWay-certified fleets to reduce its nationwide carbon footprint and testing the use of solar arrays at its New Jersey facilities. Within e-commerce, Ryder E-commerce by Whiplash offers brands access to the Ecocart plugin, giving their customers the option at checkout to make their order carbon-neutral by contributing a small percentage of their order value to support environmental projects.

The hallmarks of “sustainable” sustainability programs? The creation of long-term, realistic goals and collaborating with vendors and partners. It’s clear that sustainability is no longer a trend, but a way of thinking and a path forward for many companies.

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