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The environmental challenges of last-mile delivery

Current last-mile delivery practices are contributing to climate change, and companies need to address these ill effects. Understand how to start taking action.

E-commerce was already booming before the pandemic, and its growth has only accelerated over the last year and a half. This growth has further illuminated the environmental challenges of last-mile delivery.

Delivery drivers are racking up more miles, leading to congested streets and higher carbon production. The packaging included with all these deliveries often ends up in landfills. These issues are only growing worse, and lawmakers and the public are pressuring companies to become more eco-friendly.

Here are some of the last-mile delivery factors that are harming the environment and contributing to climate change.

Increase in carbon emissions

The increase in last-mile delivery vehicles is adding to traffic congestion and attendant greenhouse gas emissions.

Supply chain emissions make up typically 90% of a company's total emissions, and last-mile emissions typically account for about 5% of supply chain emissions, said Austin Whitman, CEO of Climate Neutral, a nonprofit organization located in San Francisco. These numbers can vary greatly depending on the products a company sells and where they manufacture and deliver them.

Regardless, with current practices and the focus on fast deliveries, the last-mile contribution to supply chain emissions is set to climb.

A recent collaboration between McKinsey and the World Economic Forum predicted e-commerce volumes in Tokyo would grow by 85% by 2030, which would require 71% more delivery vehicles.

When the number of delivery vehicles increases, so do carbon dioxide emissions, which makes up the bulk of greenhouse gas emissions. Increased traffic could lead to a 25% increase in carbon dioxide emissions in city centers, according to the McKinsey report.

The focus on faster deliveries creates a cascade of inefficient and harmful practices.

Many delivery trucks leave with space for more packages because companies are prioritizing delivery speed over full trucks, said Michael Zimmerman, a partner in the strategic operations practice of Kearney, a global management consulting firm located in Chicago.

Ensuring delivery trucks leave with a full cargo area is a seemingly simple step but one that can make a big impact.

Maximizing delivery space usage is a good first step for companies that don't know where to begin making environmental improvements, Whitman said.

Trucks are also taking longer routes to achieve same- or next-day delivery, which increases carbon emissions.

More companies should offer discounts to customers who are willing to wait for their delivery, Zimmerman said.

Packaging waste

The growth of consumer deliveries has generated an exponential rise in packaging waste. Plastic, such as plastic bags that package individual products, and Styrofoam packaging are particularly harmful to the environment, with both taking at least 500 years to decompose.

Eco-friendlier packaging can protect products just as effectively.

The new cohort of customers entering the marketplace, Gen Z-ers, are the most environmentally conscious customers that the economy has seen.
Venky RameshAssociate vice president of consumer products, retail and distribution for Capgemini, North America

O2, a beverage company located in Columbus, Ohio, is replacing plastic packaging with compostable material, said Derek Gavorcik, O2 senior manager of operations and fulfillment. The company's cardboard is currently composed of 60-70% recycled material, and O2 plans to increase that ratio to 100%. The company is also looking into sourcing recycled aluminum for beverage cans.

The company implemented these measures after it partnered with Climate Neutral, a nonprofit aimed at decreasing global carbon emissions.

Other companies are trying out similar strategies.

Ethical Swag, located in Cape Breton, Nova Scotia, creates what it calls ethically sourced promotional products for companies. To do so, it uses biodegradable materials for packaging and has reduced delivery packaging overall, said Tara Milburn, CEO of Ethical Swag. The new packaging also has a higher recycled content than Ethical Swag's previous packing material.

Refrigeration emissions

Transporting perishable goods is even more environmentally harmful than transporting non-perishable items because perishable products must be stored at a particular temperature, which requires refrigeration. Refrigeration uses more energy, so a refrigerated delivery truck creates more emissions than a non-refrigerated one, with about 40% of a temperature-controlled vehicle's total emissions coming from refrigeration. Refrigerated trucks use more gas than non-refrigerated vehicles because the vehicle draws on the engine to operate the refrigeration machinery.

In addition, the chemicals used for refrigeration, which are called hydrofluorocarbons, cause ozone depletion.

One way to alleviate refrigerated vehicles' environmental impact is to implement the latest refrigeration technology. Trucks that are using refrigeration units that meet the Environmental Protection Agency's Tier 4 emissions standard require less fuel, so companies should update their refrigeration tech to ensure they're using as little fuel as possible.

Door switch sensors can also reduce a delivery vehicle's environmental impact. When vehicle doors open, a door switch sensor turns off refrigeration so the refrigeration system doesn't use up power trying to cool the air outside the truck.

In addition, eco-friendly insulation such as biodegradable green foam can serve as a substitute for Styrofoam. Styrofoam is frequently used to insulate perishable products, but in addition to taking at least 500 years to break down, Styrofoam contains styrene, a chemical that has been linked to cancer.

Why companies need to act now

Consumer demand for fast delivery is so overwhelming, with every company being held to Amazon's delivery standards, that speed is often prioritized over eco-friendliness. However, as climate concerns rise exponentially, eco-friendly delivery must become a priority.

Creating a greener last-mile delivery is challenging, Whitman said.

"The tools and services to help brands do this are still emerging and have not been widely adopted in the way that other corporate analysis and planning systems have, such as accounting or payroll," Whitman said.

Consumer pressure to uphold greener policies will only continue to grow.

"The new cohort of customers entering the marketplace, Gen Z-ers, are the most environmentally conscious customers that the economy has seen," said Venky Ramesh, associate vice president of consumer products, retail and distribution for Capgemini, North America, a consulting and technology services company located in New York. "They are quick to either promote a brand that is focused on sustainability [or] shun the ones that aren't."

In many cases, companies that have touted their sustainability efforts -- which are also general last-mile best practices -- have received customer loyalty in return.

Shrinking Ethical Swag's packaging use, using recycled materials and teaming up with local businesses have all been worth the effort, Milburn said.

"This has been an investment of our time and resource[s] that we've been well-rewarded for by our conscious clientele," she said.

About the author
George Lawton is a journalist based in London. Over the last 30 years he has written over 3,000 stories for publications about computers, communications, knowledge management, business, health and other areas that interest him.

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