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Greening of retail logistics
Logistical activities are responsible for much of the environmental cost associated with modern retailing. For example, the British Retail Consortium estimates that trucking operations account for 10-15% of total CO2 emissions from retailing in the UK. It is hardly surprising therefore that logistics features prominently in the environmental statements of large retailers. Most of these retailers have developed, or are in the process of formulating, environmental strategies. Some have been portraying themselves as ‘green’ for many years, often on the basis of a few minor cosmetic changes to their business practices. There is now much greater commitment to making retailing genuinely sustainable both in environmental and social terms. This stems partly from a requirement to demonstrate corporate social responsibility (CSR) to investors and other stakeholder groups. It also reflects increased corporate awareness of the gravity of the environmental problems confronting the planet, particularly from global warming. As consumers are becoming more environmentally-conscious, retailers’ green credentials are becoming a more important competitive differentiator. Environmental initiatives can generate higher revenues and secure greater customer loyalty. They can also yield cost savings by, for example, cutting energy consumption and packaging waste. By happy coincidence, greening retail operations can represent best business practice both economically and environmentally. This is well illustrated by the case of Walmart which increased the efficiency of its truck fleet by 69% between 2005 and 2011 through a combination of improved routing, better cube utilisation, less packaging and various other measures. The company ‘delivered 65 million more cases, while driving 28 million fewer miles...avoiding nearly 41,000 metric tons of CO2 emissions, the equivalent of taking about 7,900 cars off the road.
This book chapter examines the adverse effects of retail logistics operations on the environment and reviews a series of measures that companies can take to minimise them. The main focus is on the lower links in the supply chain controlled by the larger retailers which generally have a logistics capability.
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