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During the COVID-19 pandemic, a shift in customer behaviour emerged as people turned to online shopping to navigate restrictions. Previously, online shopping was popular primarily among Millennials and Gen Z, but the pandemic pushed a broader demographic towards e-commerce. Despite things returning back to normal, this online buying behaviour has persisted. Companies have capitalised on this trend, recognising the cost savings associated with reduced physical store maintenance. As competition intensified, brands sought to capture market share by offering swift Last-mile Deliveries, including two-day, one-day, and even same-day options.
While convenient for customers, the rush to provide rapid deliveries has significant environmental consequences, especially regarding CO2 emissions. By 2030, the global demand for last-mile parcel deliveries is projected to surge by 78%, leading to a substantial rise in emissions. Without interventions, carbon emissions from urban delivery traffic could increase by 32%. This increase is largely due to inefficient logistics practices adopted to meet these extraordinary delivery times, such as taking longer routes, making multiple trips, and using partially filled trucks.
A recent survey found that nearly 69% of consumers are more likely to buy from brands committed to sustainable practices. As stricter government policies on carbon neutrality take effect and consumer preferences shift towards sustainability, companies and Logistics Firms are increasingly striving to reduce their carbon footprints. With last-mile delivery being a significant contributor to CO2 emissions, optimising this segment is crucial.
Here are five practical ways to achieve lower emissions in last-mile delivery:
Route and Fleet Optimisation Using AI and Data Analytics
Heavy-duty trucks, commonly used for deliveries in developed regions like the USA, Canada, and Europe, are major emitters. Two key strategies can reduce their CO2 emissions:
Efficient Route Planning: Utilising advanced AI solutions to plan optimal delivery routes, taking into account variables such as traffic congestion, peak times, weather conditions, and roadblocks, will reduce transit times and the number of miles travelled per package.
Regular Vehicle Maintenance: Keeping vehicles in top condition minimises emissions, as older and poorly maintained vehicles emit more pollutants. AI solutions and sensors can monitor vehicle metrics and predict maintenance needs, ensuring timely repairs and maintenance.
Decentralising Operations with Local Fulfilment Centres
Increasing the number of local fulfilment centres allows companies to store inventory closer to customers, reducing the need for long-distance transportation. Retail outlets and smaller warehouses can serve as fulfilment centres. To implement this strategy effectively, maintain close oversight of inventory levels using RFID scanners, advanced POS systems, and predictive AI to forecast future demands and trends.
Reducing Returns and Exchanges
Returns and exchanges significantly increase the number of trips needed for deliveries, doubling or even tripling vehicle mileage and emissions. Implementing processes such as customised delivery instructions, data visibility, and size guidelines helps customers make informed decisions, reducing returns and exchanges. Additionally, processing returns through nearby retail outlets provides an easy option for customers to return products themselves, further reducing emissions.
Rethinking Modes of Transportation
Incorporating electric vehicles (EVs) into delivery fleets can significantly reduce emissions, as EVs are environmentally friendly and emission-free. Other eco-friendly transportation options, such as bicycles, electric scooters, and even on-foot deliveries, should also be encouraged. Leading companies like Amazon, DHL, and FedEx are already testing these practices and planning to implement them globally.
Incentivising Customers for Sustainable Deliveries
Customers are willing to wait longer for deliveries if it benefits the environment. Studies show that 85% of customers are open to longer delivery times if it leads to reduced emissions and less congestion. However, awareness of these services is limited. Brands should create awareness and incentivise customers who choose longer wait periods by reducing or waiving delivery charges. This approach reduces the number of trips needed, cutting fuel costs and lowering CO2 emissions. The saved costs can be passed on to customers through discounts or free deliveries.
Implementing these Green Logistics approaches is practical for any company aiming to reduce its environmental impact. Despite challenges such as initial costs and the adaptability of new practices, these strategies offer long-term benefits, including cost savings, improved efficiency, increased sales, and higher customer satisfaction. DahNAY Logistics offers extensive sustainable Last-mile Delivery Solutions tailored to your business, helping you achieve your sustainability goals.
