Putting the Planet First: Bringing Sustainability To The Last-Mile With Logistics Technology

Putting the Planet First: Bringing Sustainability To The Last-Mile With Logistics Technology

Putting the Planet First: Bringing Sustainability To The Last-Mile With Logistics Technology

Opinion Editorial by Nishith Rastogi, Founder and CEO at Locus

 

The e-commerce sector continues to shape consumer spending habits in a significant way. Sales in the e-commerce sector globally, grew to $4.9 trillion in 2021, up from $4.2 trillion in 2020, and is projected to grow to $7.4 trillion by 2025.

Parallelly, expectations around the overall purchasing experience have also grown steeper. A 2021 McKinsey study, that when delivery times are too long, almost half of omnichannel consumers will shop elsewhere.

Such robust trends point to a major opportunity for businesses to differentiate themselves: at the last-mile delivery stage. To fulfill the exponential growth in order volumes while bringing in a high level of customer delight, businesses would have to do a complete rethink of their logistics operations to stay competitive.

 

Scale and Sustainability: The Ultimate Balancing Act

Growth is increasingly being pursued with greater emphasis on sustainability, and rightly so. In 2021, global CO2 emissions from fossil fuels, of which emissions from transportation by end-use sectors make up 37% on average, stood at 10.7 billion tonnes. To put this in perspective, coal accounted for 40% of overall CO2 emissions, releasing an all-time high of 15.3 billion tonnes.

While the electrification of vehicles is gaining traction, fossil fuel-based vehicles will continue to meet this demand for the near future. How does sustainable growth figure in this context? A quick and practical way to go about it is to leverage cutting-edge technology solutions that bring about efficiency at scale.

 

Route Planning: The Heart of Sustainable Last-Mile Practices

In essence, a lot of logistics planning boils down to finding the quickest possible route between various points of delivery before returning back to the source. When you have two points, it is not much of an issue. As the number of points increases, so do the number of possibilities increase exponentially. This is a popular optimisation problem called “Travelling Salesman Problem” within academic circles that has led to the creation of many algorithms.

Add to that the real-life constraints such as traffic density, distance travelled, fuel consumption, possible roadblocks, among others, and the number of data points could be impossible for the human mind to comprehend!

Adopting route planning solutions is one of the quickest and most practical ways to operate more sustainably. State-of-the-art route planning solutions like Locus’ Dispatch Management Platform can create optimal routes for an entire fleet in minutes. Its advanced algorithms factor in 180+ real-time constraints to create these optimal routes, which drivers can easily access through Locus’ Driver Companion App.

How does all of this translate to sustainability?

These improvements tune last-mile operations to make the optimal number of deliveries with the quickest possible routes. Over time, this adds to substantial savings on costs, fuel and maintenance, and lower carbon emissions from operations. Aside from route planning and optimisation, some other avenues worth exploring include:

 

Sustainable Sourcing of Goods

The sustainable sourcing of materials and products has gained a lot of importance in eco-friendly supply chain management in the last few years. Businesses evaluate their supplier relationships and prefer to partner with businesses dedicated to human, animal, and environmental wellness. In the case of manufacturers, it means procuring raw materials that are responsibly sourced from the environment. For retailers or e-commerce sellers, it means promoting sustainably manufactured products and using recyclable materials for packaging and deliveries.

 

Sustainable Warehousing

Although often overlooked, warehouses and storage centers use huge amounts of energy in supply chains. Investing in lighting and equipment that reduce energy consumption and maintenance costs without compromising productivity. Where the warehouse is located is also important. Building warehouses in cities instead of outskirts can reduce the need for additional infrastructures such as water and electricity connections, as well as bring increased proximity to urban customers.

 

Packaging

The management of waste from packaging and increased shipping costs is one of the biggest challenges faced by the shipping and logistics industry, especially by e-commerce, 3PL, and courier service providers. The modern customer is environment-conscious and demands orders to be delivered in eco-friendly packages that use minimal plastic and non-biodegradable materials. According to the findings of a 2021 survery by SK Group, 72% of consumers are likely to purchase products in packaging that is easily recycled or reused—a promising figure and a great incentive for businesses to take sustainability efforts seriously. Several companies are now using recycled cardboard and wrapping sheets, recycled plastic, and eco-friendly fillers to ensure eco-friendly and sustainable packaging of goods.

 

The First Steps To Sustainability

Just like any other business strategy or long-term project, an effective and successful environmental strategy can be pulled off with careful planning and the complete support of people within an organisation. Adopting logistics technology may require companies to revisit conventional ways of doing business, spot viable opportunities, and adopt new-age technology for the sake of sustainability and eventually business efficiency.

Implementing a green logistics system should begin with establishing the concept of eco-friendliness in your supply chain, defining what exactly ‘going green’ means for your
business, and setting goals accordingly. Once a clear long-term plan is developed, it is important to get the support of your workforce from the ground up and instill the sense that working towards a green supply chain is a permanent business value. This will set the foundation for optimizing each activity and achieving milestones that are the hallmarks of true sustainability.

 

About the Author

Nishith Rastogi is Founder and CEO of Locus, a real-world ready dispatch management platform enabling clients across 30+ countries to achieve last-mile excellence with over 650 million deliveries and counting. He is responsible for business expansion across geographies and heads product innovation. Before founding Locus, he worked for Amazon, where he built algorithms to counter credit card fraud. Nishith also co-founded RideSafe, a real-time route deviation detection application for women’s safety. He is a published author in experimental physics and holds patents in Machine Learning.

MORE FROM THIS EDITION

Malcare WordPress Security