It may strike some people as counterintuitive, but e-commerce is improving the sustainability of retail by creating supply chain efficiencies, recent academic studies have found. This research was conducted by Massachusetts Institute of Technology Center for Transportation & Logistics, the Global Real Estate Sustainability Benchmark organization, Carbon Management and others.
“An end-to-end accounting of carbon footprints reveals e-commerce to be more sustainable than traditional brick-and-mortar retailing,” “The key to greater sustainability in retail is reducing the transportation impact – the largest source of emissions for the United States as a whole. Here, e-commerce is substantially more efficient.”
By consolidating goods transportation into trucks and vans that make several deliveries on circular routes, instead of individual point-to-point trips made by consumer vehicles, the carbon footprint of transportation falls by more than 50% as measured by kg CO2e, the studies have shown.
There are three aspects of today’s sustainability advantages that, when taken together, forge a significant sustainability advantage that is built in for the long term. These apsects are location strategy, order consolidation and network optimization, and more effective deployment of technology.
When it comes to location strategy, today’s supply chain is led by the need to place network operations closer to end consumers. Doing so in turn reduces carbon emissions, lowers total vehicle miles traveled and cuts operating costs.
“Locating goods near end consumers creates environmental benefits by consolidating packages to maximize the load capacity of goods entering a city,” the company points out. “Not only do Last Touch and City Distribution facilities require proximity to consumers, they provide an opportunity to reduce overall transport emissions via more efficient distribution.”
Transportation Cut in Half
Academic studies estimate that the transportation portion of the environmental impact for e-commerce is less than half that of in-store shopping, even after incorporating into the figuring a higher return rate.
However, different shopping patterns end up having different impacts on the environment, the company admits. For example, basket size, return rate and the number of trips all affect the carbon footprint of an individual purchase.
However, different shopping patterns end up having different impacts on the environment, the company admits. For example, basket size, return rate and the number of trips all affect the carbon footprint of an individual purchase. When consumers shop online, they are not making trips to the store to search for and purchase items. The order is instead consolidated with other consumers’ orders, then placed into a delivery truck which travels along a single delivery route.
“Looking ahead to the customer and investor side, the key is to place decision-making around sustainable commerce directly in the hands of logistics customers. Those customers who invest in green technologies will stay ahead of their competition and win the loyalty of consumers and investors whose concerns around sustainable commerce will only increase with time.”