Sustainability in global shipping | supply chain | cross border trade

Measure, Reduce, Offset, Advise: Why These 4 Pillars of Sustainability Are Essential for 3PLs

Supply chain sustainability has risen rapidly to become a competitive issue for online merchants and eCommerce platforms. Their customers increasingly demand evidence of environmental improvements. And in light of a recent wave of accusations of ‘greenwashing’, brands and their supply chain partners are recognizing the importance of differentiating between targets and ambitions. If we don’t all report progress with the utmost honesty and transparency, we risk our reputations, and our future.  

While many retailers and third-party logistics providers (3PLs) have been proactive, an absence of international standards or direction from governments, limited availability of green fuels, and an unwillingness among many shoppers to pay a premium for sustainable services have left many in the industry uncertain about how to respond. 

Here are four areas of focus that we at Asendia USA believe will help the eCommerce sector progress credibly and responsibly on their sustainability journeys:

Measure

There’s still much to be decided about carbon measurement in aviation, shipping, and road transportation. Carbon reporting simply must be mastered by our industry – and the sooner accredited carbon calculation and labeling can be integrated into delivery services, the better. This is certainly something we’re working on at Asendia, in the absence of agreed industry standards. 

We have a quantifiable methodology to measure eCommerce supply chain emissions, taking into account a parcel’s weight is multiplied by distance traveled, with the different modes of transport factored in, including legs carried out by our first-mile and last-mile delivery partners. We will watch developments closely in our industry, regarding carbon reporting, and will adapt our methodology, if necessary, when industry standards are set. 

We’re also developing a customer level carbon calculator, ‘green label’ delivery products, and alternative last-mile delivery methods, including low emission deliveries for cities.

Reduce

Responsible eCommerce parcel shipping providers have ambitious targets to minimize environmental impacts and pass that benefit on to retail clients and end-customers around the world. A good starting point is reducing packaging and choosing environmentally-friendly materials for parcels, labels, and void fill. Electric vans and e-bicycles are now widely used by last-mile couriers around the world. Technology is helping too, with AI and data analytics helping businesses forecast and plan their logistics and warehousing resources better, cutting out unnecessary waste.

All these improvements can only be made if 3PLs work closely with their partners – whether retail clients, or the airlines and road haulage services used – to develop new initiatives to operate in ways that are more carbon efficient. For example, already the majority of Asendia’s parcels are transported in passenger planes, rather than freight planes, which is more carbon efficient.

Time and effort must also go into educating consumers so that they can make informed decisions, and commit to recycling and thinking about circularity in the ways they consume. One question is whether shoppers would be willing to pay a premium for lower-carbon delivery services. Some retailers are contemplating charging slightly more, or offering incentives like loyalty points for choosing the slower, greener delivery option.

Offset

There’s currently no way to totally eliminate carbon emissions from international eCommerce shipping, as most of the transportation industry still relies on fossil fuels, and air freight is needed for speed of delivery in most cases. However, with carbon offsetting, a more ethical way of doing business becomes possible. Emissions that aren’t addressed by efficiencies can be offset by purchasing carbon credits.

Carbon compensation can be achieved through financing global conservation projects designed to remove carbon from the air, or by scaling renewable energy systems to help phase out fossil fuels. Carbon credits provide businesses with scientific evidence to demonstrate their carbon action achievements, offering reassurance to clients, and acting as a competitive differentiator in a crowded market.

At Asendia, from January 2022 we have been offsetting 100% of all carbon emissions produced by our international transport, including those by our partners. The scope covers all international transport emissions, including the last mile delivery by local partners for national and domestic deliveries. We also offset parcel returns, our building emissions, machinery, and necessary business travel. By investing in a host of environmental projects – including investment in EcoAct verified wind farm sites in China and India – Asendia’s offsetting scheme provides cleaner energy and supports local economies. 

Offsetting may not be the perfect solution – but while the world awaits innovations such as Sustainable Aviation Fuel and other carbon-cutting developments, it’s a worthwhile way to progress towards ESG goals.

Advise

A key component of any 3PL’s green strategy should be to advise those it serves. At Asendia USA, this is about reaching out to retailers to help them reduce their own carbon footprint. For example, we offer expert guidance and waste-saving services such as data cleaning and digitized returns. We’re confident that the more collaborative support we give, the sooner benefits to the environment will filter through.

I do believe it’s possible for brands to expand into new markets around the world while keeping the carbon impact of delivery minimal. What’s certain is that going green with eCommerce delivery is non-negotiable. Legislation will be passed in the next couple of years, forcing retailers to provide full transparency regarding supply chain emissions, alongside waste and energy use metrics. 

To properly prepare for legal compliance and maintain brand loyalty, it’s well worth listening to what customers value, and giving them verified eco-delivery options to choose from. At this stage of the game, with everyone in our industry still learning, collaboration and the sharing of innovative ideas is the smartest way forward.

DEFINITION // 3PL // Common abbreviation for Third-Party Logistics that typically describes order fulfillment through a warehouse company that picks, packs, and ships online orders on demand. Third-party warehouses may also provide additional services, such as receiving bulk goods and repackaging them for individual sale as well as receiving and managing customer returns. 3PL providers usually integrate with the most popular online commerce platforms, carts, and marketplaces. Learn More

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This contribution is part of our Leadership Series, where industry professionals share valuable insights for small business owners selling online. The views expressed are the author’s alone.

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