In recent years, there has been a significant increase in awareness of the environmental impact of various industries.

The logistics sector, in particular, is facing scrutiny over its carbon emissions caused by the transportation of goods. The result is a growing pressure towards decarbonization and ESG practices.

In this blog post, you will find information about the current landscape along with 7 strategies for more eco-friendly operations. You'll also read about 3 companies that are good examples of sustainable logistics.

Here's the table of contents:

1. Carbon footprint of logistics
2. A growing pressure for ESG policies
3. How to reduce carbon emissions in logistics
   1. Electric vehicles
   2. Delivery drones and robots
   3. Route optimization
   4. Encourage customers to pick sustainable delivery options
   5. Eco-friendly packing
   6. Smart delivery lockers
   7. Alternative fuels
4. Companies with sustainable delivery practices
   1. Amazon
   2. DHL
   3. Hived
   4. Lush

Carbon footprint of shipping

Logistics play a pivotal role in the modern economy. Unfortunately, they also contribute to a huge part of global carbon emissions. International shipping (only a part of the all logistics processes) produced 706 million metric tons of carbon emissions (MtCO₂) in 2023. Data about 2024 is not yet available, but we doubt it will be less as the numbers have been increasing since the drop during 2020.

A McKinsey research says that road freight in particular generates 53% of CO2 emissions within global trade-related transport. And according to IEA international maritime shipping created 2% of global energy-related carbon dioxide emissions. Historically, the trend has almost always been upward. The only exception was in 2020 during times of global COVID-19 lockdowns. Last mile delivery on the other hand produces 41% of global emissions in the logistics sector according to The World Economic Forum.

A growing pressure for ESG policies

ESG stands for Environmental, social, and corporate governance. The framework shows how a company supports sustainability, human rights, and transparent operations. And while some time ago it was rather a nice-to-have option, it has now become a must for businesses worldwide.

The reasons are many including climate change, inequality, the shift towards a circular economy, the need for transparency, and the growing global ESG regulations and pressure from society is another.

The Environmental pillar of ESG includes all things energy efficient, reducing carbon footprint, waste reduction policies, and more. While there are some differences between its implications in the US and Europe for example (including the fact that the pressure towards embracing ESG in Europe is bigger), the general idea is pretty common.

How to reduce carbon emissions in logistics

Logistic companies can implement various strategies and technologies to reduce their carbon footprint in transportation and delivery. A holistic strategy will not only contribute to more eco-friendly operations but will also improve efficiency and reduce costs and build a positive brand image.

Here are 7 effective ways to achieve this:

Electric vehicles

One prominent approach is the integration of electric vehicles (EVs) into road transport fleet as most EVs produce zero or close to zero CO2 emissions.

They are particularly useful in last mile delivery because of the short distances, driving at low speed, time spent in congestions, and the multiple stops a day. According to research, EVs have the potential to reduce last mile carbon emissions by up to 50% by 2030. Moreover, there are tons of global incentives and subsidies that encourage the adoption of EVs.

First and middle mile delivery can also benefit from zero-emissions vehicles in some cases. Battery capacity has been one of the biggest objections for a long time but during the past years manufacturers like Ford, Daimler and Rivian have released transportation vehicles specifically designed for longer distances.

Additionally, the number of countries that enforcing regulations and EV requirements is growing. For example, EU regulations require trucks to reduce carbon emissions by 30 percent by 2030. This is possible only when part or all delivery fleets are electric. In the US, the ACT regulation demands manufacturers to restrict all truck sales to electric models by 2045.

Delivery drones and robots

The superpower of delivery drones lies in their ability to bypass road traffic and deliver packages faster.

Compared to traditional truck delivery, drone delivery produces 25% less carbon emissions. It also reduces total cost by 22% and shortens delivery time by 21%.

Similarly, autonomous robots become popular for last mile deliveries in urban areas. They have a positive impact on the environment because they produce minimal or zero CO2 emissions.

Their smaller size helps them to navigate faster in dense urban areas. It also allows for optimization of space.

Serve Robotics, one of the pioneers in the sector has a great motto. It’s “Why deliver 2 pound burritos in 2 ton cars” and perfectly represents the issue with space optimization.

Autonomous delivery robots rely on advanced AI models to navigate throughout the city. They can understand the dynamics of traffic, pedestrians, and obstacles along the way.

Route optimization

An effective strategy to decrease carbon footprint is to optimize delivery routes. This way, businesses can reduce travel distances and avoid unnecessary stops.

To achieve efficient route optimization, it’s best to rely on delivery management software. Retailers can also do it manually, but it becomes an overkill once the delivery volume increases.

Delivery management platforms use AI algorithms to automatically predict the best route based on multiple factors. They take into account the distance to the client, preferred delivery window, weight, volume, truck capacity, and more.

At Ufleet we do exactly that. If you’d like to learn more, get in touch or watch the video below.

You can also check this CO2 and costs calculator. You’ll get an idea of how much you can save based on your number of vehicles and deliveries.

Encourage customers to pick sustainable delivery options

Retailers can encourage customers to choose more eco-friendly delivery or packing options. 

Surveys indicate that a significant percentage of consumers are willing to pay extra for environmentally friendly delivery services.

Brands can offer delivery slots during off-peak hours, for example. This allows combining multiple orders for a single trip. This not only lowers emissions but also helps avoid traffic congestion in urban areas.

Another option is to offer in-store pick-up for certain deliveries.

Eco-friendly packing

Businesses can invest in packing materials that are environmentally friendly. Or reduce packing materials to a minimum. 

Recyclable materials or compostable product packaging reduce CO2 emissions associated with production, transportation, and waste management.

Smaller, lightweight packaging also contributes to reducing fuel consumption during transportation.

Smart delivery lockers

Another solution is smart delivery lockers. These lockers provide a convenient way for customers to receive their packages. They also reduce the need for individual trips to each customer's doorstep.

By combining deliveries to a centralized location, retailers can optimize routes, reduce fuel consumption, and lower carbon emissions.

Smart lockers also offer customers the flexibility to pick up their packages at a convenient time. This minimizes the chances of failed deliveries and subsequent re-delivery attempts.

Alternative fuels 

Biofuels offer a greener alternative to traditional fossil fuels. Such alternatives allow businesses to lower their carbon footprints without the need for a complete overhaul of their fleets.

Liquid natural gas (LNG) and compressed natural gas (CNG) usually offer moderate carbon savings.

Synthetic fuels and biofuels offer even lower-carbon options. Examples include bio-LNG, bio-CNG, and hydrotreated vegetable oil (HVO) biodiesel.

Companies with sustainable delivery practices

Amazon

Back in September 2019, the e-commerce giant announced the purchase of 100,000 electric delivery vans from Rivian. Amazon aims to achieve net-zero CO2 emissions by 2040. The company also wants to become 100% reliant on renewable energy by 2025.

In October 2023, Amazon also successfully launched its Amazon Prime Air drone service in College Station, Texas. The focus, for now, is medical products. Eligible customers in this region can receive their medications within an hour of placing their order.

DHL

Another company making efforts towards eco-friendly delivery is DHL. The company plans to invest €7 billion into reducing greenhouse gases. The ultimate goal is to achieve carbon-neutral logistics by 2050.

The tactics include alternative fuels, energy-efficient warehouses, and innovative delivery solutions.

By 2030, DHL aims to electrify 60% of their last-mile delivery vehicles. Another goal is to increase the share of sustainable fuels to over 30%.

HIVED

A great example is HIVED which is a zero-emissions logistics company. Before founding HIVED, its founders had a data-focused van advertising startup.

Analyzing data helped them to truly understand the negative impact of logistics. They quickly realized that traditional parcel delivery is causing huge harm to the environment.

This is how HIVED was born. Its vision is to create the most sustainable, people-centric, efficient and affordable delivery network.

Currently, the company operates a default tailpipe emission-free fleet of vehicles. The founders understand that even EVs have a footprint because of their production process, though.

That's why they are constantly looking for new solutions and are constantly improving.

LUSH

LUSH is a British cosmetics retailer that puts a huge emphasis on sustainability. Their environmental policy includes limiting packing to a minimum.

Their delivery boxes are simple and contain only the bare packing essentials. This allows them to optimize space in delivery fleets.

LUSH also strives to reduce carbon emissions from unnecessary business flights and air freight. They aim to electrify their own vehicles and support early adopters of alternative fuels.

LUSH is also famous for sending solid products “naked”. This means LUSH puts such products directly into the delivery box, without individual packing. This way, the company saves more than half a million cellulose bags a year.

They also encourage customers to return packing for recycling. The company uses plain and all-black plastic for all LUSH products. This helps them recycle and reuse the packing returned from customers.

Key takeaways

The world has become more aware of the urgent need to address climate change and promote sustainable practices. The logistics sector must adapt to meet these new expectations. 

Route optimization, electric vehicles, and drone and robot delivery allow businesses to reduce their carbon emissions. Sustainable packaging, smart delivery lockers, and alternative fuels help too.

Embracing ESG principles allows businesses to be environmentally responsible. It also helps to build a strong and positive brand image.

The future of delivery lies in sustainable practices. By making conscious choices today, companies can contribute to a greener world tomorrow.

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