Global Logistics: A study on Greener and more sustainable supply chain delivery of Amazon, UPS & DHL

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Logistics emissions data

Logistics are regarded as a key determinant of a company’s performance, through the efficiency of supply chain systems and the calculation of the profitability of product sales. The calculation of profitability in the majority of logistics history has included only economic performance (McKinnon, et al., 2015), however, in recent years due to globalization and digitalization, wider environmental and social impacts are of large importance for green marketing and future strategy of supply chain providers.

Green logistics are now regarded as good business practice as it provides a lot of opportunities for having a positive impact on financial and operational metrics without the need to trade off economic costs against environmental benefits. As stated in the SFC Annual report (SFC, 2020), freight transportation generates 8% of global CO2e emission and as much as 11% if logistics sites are also considered. Sustainable reforms of the sector are required as between now and 2050 the world will see a doubling in freight emissions, according to the International Transport Forum.

Different modes of transport of freights are used based on the distance and time of the delivery requirement. Figure 1 and Figure 2 show the data of CO2e emissions of UK and the logistics provider DHL which both suggest that air transportation accounts for the majority of the emissions also justified due to usage of jet fuel and damping of greenhouse gases (GHG) emission at high altitudes which increases the quantity of the global warming potential (GWP) impact in the atmosphere (Sathaye, 2006).

Figure 1 Estimated average CO2 intensity values for freight transport modes (United Kingdom) (McKinnon, et al., 2015)

Figure 2 DHL Total carbon emissions by source in 2019 (DHL, 2019)

Mitigation of logistics systems environmental impact

A four-step roadmap developed by the SFC as outlined in Figure 3 identifies the importance of calculating emissions across the multi-modal supply chain as well as setting targets on emissions reduction and the requirement of implementing new technological solutions as well as the need for collaboration across the industry.

Collaboration of businesses, governments, research, and civil society should be achieved for a sector transformation to be realized. As defined by (Sathaye, 2006) and shown in Table 1 teaching, four solution types were identified of impact reduction, emissions reduction, changing operations, and economic and societal development considerations for making supply chains greener.