Can a parcel be green and on-time? The Green Supply Chain business model

Climate change driven by man-made greenhouse gas emissions is one of the most pressing challenges that society currently faces. Considering that a significant part (approximately 13%, according to the Intergovernmental Panel for Climate Change) of these emissions is attributed to transport, and to the logistics industry more specifically (around 5.5% of global GHG emissions), it is no surprise that there is an increasing pressure for sustainable logistics services.

According to Deutsche Post’s Green Trends Survey, a 2010 survey taken by 1,800 business customers and 1,800 end consumers in six key global markets (India, China, the U.S., Brazil, the UK, and Germany):

  • Logistics is increasingly perceived as strategically important for CO2 abatement: almost two-thirds of business customers believe companies will regard transportation as a key lever to reduce their carbon footprint.
  • Business customers expect the logistics landscape to change, with 64% believing that CO2 labelling will become standard. Also, 52% of end consumers say they will pay attention to CO2 labelling on services and products.
  • Business customers are inclined to use green logistics, with 57% of them saying that they will favour a greener provider over a cheaper one, over the coming years
  • Two-thirds of the end consumers expect greener logistics services to be available at the same price as conventional transport. It is noteworthy however that 56 % of business customers believe consumers (their customers) would prefer greener over cheaper solutions.

DP DHL initiated a few years ago a global environmental protection program, called GoGreen. Through GoGreen, DP DHL has publicly committed to a carbon efficiency goal of improving its carbon efficiency by 30% by the year 2020, compared to its 2007 baseline (including its subcontractors). Green products and services were initially offered to customers as carbon-neutral delivery for letter mail, parcel and express items and then were rolled-out to cover all business divisions, and were expanded in terms also of service range. Currently, these include:

  • Carbon reporting on emissions arising from products and services used by the customer, thus providing an account of the customer’s carbon footprint (available since 2011). This service, called “Carbon Dashboard” offers in addition to reports on actual carbon emissions, the simulation of alternative supply chains combined with a carbon efficiency analysis.
  • Carbon consultancy, involving the analysis of customers’ entire supply chain and offering strategies for optimizing transport routes and reducing carbon emissions.
  • Carbon reduction, offering customers measures for reducing emissions and saving costs (e.g. improved aerodynamics through “teardrop” trailers, engine modifications for reducing fuel consumption, or the use of hybrid vehicles).
  • Carbon offsetting, by investing in officially recognized climate protection projects. This process entails purchasing carbon credits for the customers’ carbon-neutral shipments.

Using  green products and services, customers can ship materials without causing carbon dioxide emissions. Between 2008 and 2009, GoGreen shipments increased by 387%, an increase that came mainly from business customers regarding it as an important ingredient of their own carbon reduction schemes. In 2011, around 1.86 billion shipments have been sent with GoGreen.

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