What is green distribution? A guide to sustainable logistics
Businesses that regularly transport goods often ask an important question: What is green distribution, and is it a feasible way to reduce the impact on our planet? Green distribution refers to logistics practices that minimize environmental harm. It is possible to make greener choices across the supply chain, including storage, order processing, packaging, and final-mile delivery. Green logistics reduce waste and emissions—ideal for businesses that hope to shrink their carbon footprint.
Green distribution is just one solution for a growing problem, but it stands to make a big difference. The European Commission reports that maritime transport alone is responsible for about 2.5 percent of global greenhouse gas emissions. The Environmental and Energy Study Institute found that commercial aviation is responsible for about 5 percent of global warming. And the US Environmental Protection Agency reports that containers and packaging comprised 82.2 million tons of municipal solid waste—28.1 percent of all municipal waste produced in the U.S. in 2018. In short, the impact of logistics activities can add up. At Agility, we believe it’s in our collective best interest to do our part for a greener world. That’s why we’re committed to building greener supply chains and educating our clients about how they can ship goods both sustainably and efficiently.
Importance of sustainable distribution methods
Sustainable distribution methods reduce carbon dioxide (CO2), a greenhouse gas causing global warming. These practices also reduce waste and optimize resources to improve the health of our planet and build a better future. And they help businesses take action to make changes that matter to them and their customers.
How does distribution impact your ecological footprint?
Distribution consists of many activities, from packaging to transportation, that have a substantial impact on the earth. One way to think of this is in terms of your organization’s ecological footprint. This term refers to how much of the biological capacity of the planet your business needs in order to operate. Calculating this accurately is far from simple since you must take into consideration everything from the urban infrastructure and roads you rely on for distribution to the waste products and CO2 emissions you produce.
Virtually all businesses contribute to what’s known as ecological overshoot. This is when our collective demand on the Earth’s ecosystem exceeds its ability to absorb our carbon dioxide emissions and regenerate the resources we have used at a rate that keeps pace with our consumption. That’s disheartening, but there’s a lot we can do to reduce overshoot. Even actions as simple as recycling can shrink a company’s ecological footprint. And adopting green distribution methods can make a big difference, especially over a long period.
What are the benefits of sustainable distribution methods?
Hands down, supply chain sustainability is better for the planet. But businesses can achieve many other benefits from striving for sustainability:
- Increased efficiency: Green distribution practices prioritize efficiency to prevent wasted energy. That could mean anything from packing trucks or shipping containers more efficiently to achieving optimal fuel efficiency during ground transportation. Sometimes, it even comes down to how seamlessly your team works together to get the job done, which could mean less idling equipment. All of that adds up to significant energy savings and reduced carbon emissions. But what’s more, a business that runs smoothly tends to have a happier team, better customer outcomes, and less wasted resources. Since improving operational efficiency tends to be a goal for most businesses, think of this as a win-win for you and the environment.
- Reduced costs: Needless to say, reducing energy use is better for your bottom line. Even relatively small changes, like remembering to turn off outdoor floodlights during the day, could lead to big savings for your operation. For instance, a 2018 energy audit conducted by researchers found that a Zimbabwean industrial site could achieve annual electricity cost savings of over $50,000 per year simply by improving its lighting technologies. And when one of our customers wanted to decrease supply chain waste by reusing cartons, Agility collaborated with them to double carton reuse and save $128,000 over a period of five years. When you consider that sustainable distribution streamlines many functions across your supply chain, it’s easy to imagine how fast the savings can add up.
- Improved risk management: Sustainable distribution methods can reduce several kinds of risk for your organization. For one, greener practices are better for the overall health of your employees and the environment surrounding your distribution centers. After all, your business can be liable for issues resulting from harmful practices—like not adhering to regulations for greenhouse gas emissions from commercial trucks. In addition, organizations face risk to their reputations. Customers value environmentally responsible businesses. Irresponsible behavior such as excessive waste generation or failure to take environmentally beneficial actions can ultimately harm your brand.
- Improved service: Increasing your organization’s efficiency doesn’t just achieve green gains. It leads to satisfied customers. For instance, by streamlining your operations to reduce energy use, you could achieve cost savings and pass them on to consumers. Perhaps more importantly, today’s customers care about making sustainable choices. According to a recent study by Barron’s, two-thirds of North American consumers say they prefer eco-friendly brands. Changes such as switching to recyclable, biodegradable packaging material can help your customers feel better about their purchasing decisions, making them more likely to shop with you again.
- A competitive edge: Making the effort to go green can lead to a competitive advantage across many areas of your organization—from employee recruitment and retention to positive online reviews. Why? Because green business practices are better for workers, communities, and the planet. Doing your part to protect the environment, such as saving water, switching to renewable energy, and using recycled materials ensures your organization can continue operating sustainably and profitably in the future. If your competitors aren’t doing the same, they’ll struggle to adapt to the values and regulations of the changing business landscape. Finally, committing to sustainable distribution practices is key to keeping your organization top of mind for environmentally conscious consumers. When it comes to communicating your values to your customers, a choice as simple as compostable packing materials speaks volumes.
Getting started with green distribution
Turning a traditional supply chain green doesn’t need to happen overnight. It all starts with breaking down your processes to see how you could make more environmentally friendly choices at every step.
Components of green distribution
Every component in the distribution process has room for improvement. Achieving truly sustainable operations means taking a close look at every leg of your customer’s and product’s journey:
- Warehousing: Could your warehouses be greener? Most likely, yes. These buildings tend to be drafty and, in some cases, larger than they need to be. This makes them costly to heat and cool. And of course, heating and cooling processes—along with lighting and warehouse equipment—cause significant CO2 emissions. In addition, warehouse location matters. Distribution centers located few and far between means more miles of ground transportation, leading to more emissions.
Overhauling your own warehouses or rebuilding from the ground up can be prohibitive, though when constructing new distribution centers, green options abound. For instance, warehouse architecture could minimize wasted space and even maximize natural light to reduce the need for electric lights. That said, there are many ways to improve the warehouses you already have—starting by changing the way you power them. For instance, installing solar photovoltaic roof panels lets you make use of a plentiful resource in shade-free warehouse complexes: the sun. Painting your roof a reflective color can help keep your warehouse cooler and reduce the cost of air conditioning. And hydro and wind power offer alternative energy sources that can replace or minimize your reliance on fossil fuels. These changes can make a big difference in your carbon footprint, not to mention your operational expenses.
Do you rely on a third party for warehousing? In this case, location is everything. Ideally, choose a warehousing partner with many locations around the country. Having distribution centers convenient to major shipping ports, airports, and urban centers with a high concentration of your customers can help you maximize ground transportation efficiency.
- Packaging: Unsustainable packaging doesn’t just lead to more waste in landfills. It causes environmental impact at every phase of its life cycle, from material sourcing to transportation to disposal. Packing peanuts made of Polystyrene foam are especially notorious. They aren’t biodegradable and cause harm to fish and wildlife who eat them. In addition, producing packing materials often uses nonrenewable resources, like plastic. NPR reports that emissions from producing and incinerating plastics could amount to fifty-six gigatons of carbon between 2019 and 2050.Fortunately, there are many alternatives on the market. For starters, shippers can choose from packaging materials made from recycled materials, including corrugated cardboard “bubble wrap.” Air pillows are another sustainable packaging idea. Since they’re mostly air, they minimize the material needed to make them but keep products safe during shipping. And lately, many biodegradable packaging materials have entered the market. For instance, cornstarch packaging has plastic-like properties but consists of organic materials. And mushroom packaging uses agricultural waste, so your customers can compost it in their backyards.When evaluating green packaging, consider a few factors. For one, packaging should ideally make use of renewable energy at every stage of its life cycle. That includes materials sourcing, manufacturing, transport, and disposal. In addition, optimized packaging should use renewable and recyclable materials. And finally, it should have a design that is as efficient as possible to minimize waste at every step—and optimize loads for transport too. Even a change as simple as switching from rigid to flexible packaging can increase the volume of goods that fit into a truck, reducing loads and overall emissions.
- Transportation: In most cases, transportation will be the area of your distribution operations that has the most environmental impact. Vehicles that run on gasoline and diesel emit CO2, the major culprit in environmental issues such as global warming and acid rain. Add to that the fact that fossil fuels are nonrenewable resources, and sourcing them presents an ongoing environmental threat. And ground transportation is not the only source of harmful emissions. Shipping by air and sea—a critical part of the journey for importers and exporters—causes environmental hazards too. Beyond air pollution, ships can release oil and chemicals into the sea, harming water quality and marine life. The same goes for planes, since jet fuel and other chemicals can enter waterways in the form of runoff.So what can you do? For ground transportation, you can use fleets that run on alternative fuels or even invest in electric trucks, which have improved to the point where they’re suitable for long hauls. Other green transportation methods, such as rail, offer another possibility. When shipping by air or sea, consider consolidating goods as much as possible to minimize the number of shipments you make in a given time frame. By packing more efficiently, you could ultimately reduce your carbon footprint. Finally, partner with a freight forwarder that’s committed to sustainability—like Agility. We’ll help you make the necessary changes to your supply chain to ensure a greener journey at every step.
How can existing practices become economically and sustainably refurbished?
Wondering how to develop a green distribution strategy without overhauling every aspect of your operations all at once? In many cases, some adjustments to your existing practices can make a big difference. Here are some tips to help you start transforming your distribution processes—even if it’s just a little at a time:
- Audit your HVAC system. Heating, ventilation, and air conditioning (HVAC) systems use a lot of energy, and they aren’t always as efficient as they could be. An HVAC technician can spot inefficiencies and fine-tune your system to save you energy. That’s good for the environment and your bottom line.
- Invest in insulation. You’ll recoup the costs in no time. Drafty warehouses require much more energy and expense to achieve temperature control. By installing installation, you can heat or cool your warehouse more efficiently and even save wear and tear on your HVAC system.
- Keep equipment maintained. When equipment isn’t in optimal shape, it may not perform as efficiently. Maintenance also extends the life of the product. Remember, replacing equipment before the end of its life span has an environmental impact too. But when the time is right, look for energy-efficient replacements.
- Switch to energy-efficient lighting. Today, there are many great options on the market, like light-emitting diodes. Making the upgrade is greener and will reduce your electricity bill.
- Research new packaging options. It can take some time to find the right packaging solution for your products, so get started now. Biodegradable materials are more eco-friendly and can even make a good impression on your customers. In addition, much of the packaging on the market today is lighter in weight, making it more efficient to ship. That can lead to reduced emissions during transport.
- Consolidate your shipments. Do you frequently send out less-than-truckload shipments? Consider sending full truckloads, since it’s easier to efficiently pack a full truck with no wasted space. Optimal packing means fewer trucks on the road and less emissions.
- Change trucking policies. Having clear engine shutdown policies help drivers know how long is too long when it comes to idling. It’s also important to evaluate trucker speed and provide clear guidelines for how fast they can go. That means knowing your vehicles’ optimal range and figuring out the right balance of fuel efficiency and acceptable delivery speed. These kinds of changes can make a big difference when it comes to reducing carbon emissions.
- Offset your carbon footprint. A good start to going green is to make a donation that offsets your organization’s carbon use. Many organizations offer this service, giving you a way to make contributions to vital projects such as planting trees and restoring the rainforest. Just as importantly, it’s a way to start calculating and becoming conscious of your carbon emissions. After all, awareness is the first step to change.
Best products for green distribution
Today, businesses are fortunate to have many options for achieving green distribution. In particular, the marketplace offers a wealth of better products and packaging to replace unsustainable kinds. When looking for the best products for green distribution, consider the following criteria:
- Low emissions. Emissions don’t just apply to manufacturing and transport. Products themselves can emit volatile organic compounds and formaldehyde. Always opt for goods that promote good air quality—indoors and out.
- Choosing products and equipment built to last ultimately leads to less waste. However, when choosing material like packaging, too much unnecessary durability could actually lead to more waste. After all, your customer is only going to recycle or dispose of the materials. So invest in durability when it makes sense.
- Recycled content. Products that use postconsumer or postindustrial recycled content tend to be the greener choice.
- Reused content. In some cases, it’s possible to find salvaged or upcycled products. For example, if you’re constructing a warehouse from the ground up, consider incorporating reclaimed materials.
- Manufacturing process. How was the product made? Items made via natural or renewable resources—such as wood or corn—are more sustainable than those made from nonrenewable resources, such as petroleum. Also, make sure the manufacturing process doesn’t result in toxic by-products that could damage the environment.
- Supplier location. Products that need to be shipped long distances, or that use imported materials, require more energy throughout the supply chain. If at all possible, choose local, sustainable suppliers.
- Ozone friendliness. Look for products that don’t contain ozone-depleting substances. For example, aerosol sprays, blowing agents for foams and packing materials, refrigerants, and other substances contain chlorofluorocarbons, which can damage the ozone layer.
- Sustainable harvesting. This applies to wood or other natural products. Sustainable harvesting or sustainable agriculture uses a set of practices and principles to ensure careful resource management. For instance, instead of clear-cutting woodlands, foresters harvest trees selectively and make sure to leave plenty for the future.
- To minimize waste, choose products that are recyclable. In particular, look for materials that are suitable for a closed-loop recycling system. Closed-loop recycling is when manufacturers can turn recycled materials into the same products many times over without much loss of quality. For example, it’s possible to recycle glass and metals such as steel again and again. And to minimize waste, avoid single-use products whenever possible.
- Distributors can’t control whether customers recycle packing material. But with biodegradable materials, at least they know packaging will break down easily in a landfill. Consider that paper products can biodegrade in as little as a few months, whereas plastic bags take five hundred years or longer.
When evaluating the types of packaging most sustainable for green distribution, you need to factor in not just the above criteria but also your performance goals. After all, having your products break during transit isn’t sustainable. Fortunately, there are plenty of great options out there—from corrugated cardboard packing materials to reusable plastic shipping cartons. Your choice comes down to whether a given product’s costs, performance, and sustainability meet your organization’s objectives.
How to achieve green logistics in the transport stage
A key principle of green logistics is minimizing wasted energy and its resulting emissions. You can do that by optimizing cargo space, which helps reduce the number of trips you need to make. In addition, load-planning software takes the guesswork out of logistics planning. Since load optimization involves many factors—from vehicle capacity to load requirements and how far your goods need to travel—logistics companies such as Agility rely on this sophisticated software to plan optimal routes. Rely on us to ensure your shipment gets from point A to point B as efficiently as possible.
Latest green practices in supply chain management
Supply chain management is a constantly evolving field, with new and greener solutions arriving by the day. In part, that’s because green supply chains lead to competitiveness and economic performance. Since sustainability measures increase energy efficiency and rely on cost-efficient recycled products, they’re good for a business’s bottom line.
In fact, Boston Consulting Group found that businesses leading in environmental, social, and governance practices have an 11 percent valuation premium, compared to their competitors. What’s more, the majority of consumers say they are willing to pay a price premium for sustainable goods. As consumers clamor for greener brands, companies must compete to incorporate sustainable practices throughout the value chain. This drives green innovation in pretty much every field—including supply chain management.
How can supply chain leaders incorporate green practices while maintaining profit margins?
Today, supply chain leaders use the following methods to go green while maintaining—or growing—their profits:
- The green service model. These days, supply chain leaders don’t have to invest in all-new green equipment or the technology that enables logistics efficiency. They can rely on the service model instead. You can find everything from eco-friendly warehouse lighting to alternative energy sources as a service. That means you don’t have to assume the upfront expense, risk, and ongoing maintenance of green solutions. An expert service provider handles everything for a monthly fee.
- Thinking outside the box. It’s fully possible to combine green distribution practices with the goal of increasing cost efficiency and profits. Supply chain leaders do this every day. For instance, they may discover that new, lighter packaging reduces cargo weight and volume—thereby trimming costs and energy use. Or they may determine that shipping large volumes of goods by ocean freight instead of transporting smaller quantities via air freight is both a cost saver and a more sustainable choice. Don’t be afraid to dive in with both sustainability and profitability in mind and see what creative solutions you come up with.
- The circular economy. Traditionally, many business processes—including the supply chain—produced a lot of waste that ended up in landfills. Today, supply chain leaders are changing that by giving waste materials a new life. This method is known as the circular economy model, and its possibilities are endless. For instance, businesses could turn recycled content into green products or packaging or sell by-products instead of discarding them.
The challenges of implementing green practices in supply chain management
When trying to improve sustainability performance in the supply chain, businesses tend to struggle with the following areas:
- Since the field of sustainable supply chain management is still evolving, supply chain leaders may not know the latest facts and best practices.
- Operational changes. Yes, change can be disruptive. Implementing green initiatives may require you to reimagine ingrained practices or enforce new protocols. In time, these will become your team’s new normal.
- Finding cost-effective and sustainable materials and equipment—and establishing new supplier relationships—may require time, planning, and upfront costs.
- When implementing new measures, expect some initial resistance. Communicating the importance and efficacy of sustainable practices—and listening to your team to address snags along the way—is key to going green.