The logistics industry: driver for sustainable business

Large corporations look for the support of their logistics providers when it comes to reducing their own CO₂ emissions. For them, logistics have long been much more than a standard service to manage their business. Rather, they are a strategic lever to fulfill their own responsibility to contain climate change.

For those logistics providers who have recognized this trend and incorporated it into their strategy, this rethinking by customers offers great opportunities to gain market share. "Our industry can and will promote the trend towards a more CO₂ efficient economy - while actually enhancing commercial success. Although many people still see a contradiction between economic growth and environmental protection, anyone who runs his business in a more environmentally friendly way has every chance of increasing profitability in the longer term also," explains Frank Appel, CEO of Deutsche Post DHL.

Rising demand for "green" logistics

A key finding of the study "Delivering Tomorrow: Towards Sustainable Logistics," recently published by Deutsche Post DHL - number one in the industry worldwide - is that environmental aspects will have a substantially greater bearing on the future relationship between logistics providers and users. The extensive data underpinning the study, based in part on a survey of 3,600 business customers and end-users in India, China, the USA, Brazil, the UK and Germany, confirms the growing need for "green" logistics services. In Asia in particular, 70 percent of the consumers surveyed rate climate change as the most urgent problem.

But interest in sustainable logistics is high in other countries too: in 2009, for example, Deutsche Post DHL carried 705 million GoGreen shipments on behalf of its customers around the world, almost five times as many as the year before. And in 2010, the same figure was attained after just nine months. For this service, which the leading logistics provider offers in 36 countries, the CO₂ emissions generated from transporting and processing customer shipments are measured and offset via external climate protection projects.

Know-how in Carbon accounting a critical success factor

Another finding from the study is that more and more customers are expecting their logistics providers to demonstrate experience in CO₂ accounting and managing carbon emissions. “We are especially interested in logistics providers with a comprehensive operational carbon accounting system. Measuring our CO₂ balance is particularly valuable to us because we can then understand the environmental impact of our supply chain and identify emission hotspots and further potential for improvement," says Lars Siebel, head of global logistics procurement for Henkel AG & Co KGaA, quoted in the study by Deutsche Post DHL. Know-how in this area is thus a critical success factor for future market leaders in logistics.

For the logistics industry itself, sustainable solutions and technologies are the key to improving its own CO₂ balance. Even today, the industry can reduce its CO₂ emissions by making its distribution network more efficient. The right modes of transport, optimized use of load capacity and more efficient route planning are crucial factors. However, it also becomes clear from the study that, due to the immense investment required, the general introduction of truck fleets with hybrid or electric power demands a joint effort by industry, manufacturers and policy-makers.

"Logistics industry can set an example to many other sectors"

Many of the business customers surveyed also believe that the political pressure needs to be intensified over the next few years. Frank Appel calls for a coordinated international approach: "Once a price is set for CO₂ emissions, it is particularly important for decision-makers to ensure that there are uniform rules. If different rules continue to exist side by side, we will only see a shift between regions, which is to nobody's advantage."

So while discussion on the proper implementation of climate targets is likely to continue at all levels over the next few years, leading corporations are considering the issue of CO₂ reduction more and more in their day-to-day decisions. Based on the findings of the study, Deutsche Post DHL CEO Frank Appel sees a leading role for his industry in this new emphasis on sustainability: "Because of its global transport network, its technical expertise and its involvement in the whole supply chain, the logistics industry can set an example to many other sectors that want to reduce their own emissions. We can and must act as a driver for sustainable business."