Hello again, and welcome back to the blog.
With winter approaching, and energy providers crumbling under the twin pressures of Brexit and lack of supply, we thought it was about time to have a look at distribution. And specifically, the ever changing Last Mile of delivery.
Unsurprisingly, transport is a significant contributor to global carbon emissions, making up 28% of UK greenhouses gases emitted in 2020 (the largest portion). Road vehicles make up 75% of these emissions, and whilst big strides have been made over the last 30 years, light freight (vans) have done poorly. Van emissions have increased by 67% over the same period, meaning contributions by Vans to UK GHG emissions is now roughly equal to HGV emissions (source: Department for Transport).
There's a lot of data here, so I'll summarise. If you're delivering to urban customers, having the pulse on that last mile of delivery is ever more important; both for customer experience and the planet at large.
If you're delivering to urban customers, having the pulse on that last mile of delivery is ever more important; both for customer experience and the planet at large.
From the perspective of our clients, when evaluating the GHG emissions of a product, we expect distribution and transport to make up 25%+ of the footprint of studied product. In practice, this is (almost )reflected in revenue, with transport costs making up 10-30% of COGS. And typically, the Last Mile is the area where sustainability practitioners can have their first impact, and where competition is the most fierce.
What does the future look like? Make decisions now
When we look at building a long term strategy, I like to look to the Netherlands for some inspiration. Amsterdam is a prime example of a city taking meaningful action. Not only has the city made ambitious, achievable commitments (net zero by 2030), but as Amsterdam's deputy mayor recently laid out in an excellent podcast (https://freakonomics.com/podcast/doughnut-economics/), they've broken these commitments down from 10 years, to 1 year, to one month, to what needs to happen tomorrow. This is a story happening across the Netherlands. 5 Dutch cities have already announced 0 emission zones by 2025. That means all fright will need to be electrified, infrastructure will need to be built, and plans for logistics are being made now.
What do we need to make decisions about?
Simacan, a Dutch Technology company, identified a few common themes Dutch companies have begun implementing in preparation for a Zero Emission city,
Can I use urban specialists? - green city specialists are taking over city logistics in many cities in the Netherlands. The industry has seen a boom, largely because importers recognise the value of their investments in technology, personnel, and localised expertise.
How much have I invested in real time data? - to optimise capacity, enable just in time delivery, and find the safest, least congested routes in and out of cities
Can I use City Hubs? - a joint strategy, allowing value chains to use biofuels and HGVs to hand off to urban specialists for the last mile. Typically, just-in-time delivery has meant better collaboration between all parts of the supply ecosystem, which in turn means...
What are my opportunities to share networks? - sharing capacity, data and expertise between competitors and distribution partners. Already common in E-Commerce, Dutch competitors are already weighing up potential partners and evaluating the risks and benefits of partnering.
Sharing resources seems to be where the needle is moved the most. We'll be focusing on this in next week's blog.
In the meantime, Do It Properly. If you're considering the impact of logistics on your Net-Zero goals, why not sign up for an assessment with us: www.doitproperly.co/assessment