Study says sustainability is key for the future success of the logistics industry

Source: Material Handling Industry of America

Nov 02, 2010

The pursuit of sustainability will transform the logistics industry, both in terms of its business model as well as the range of advanced solutions and technologies that will be used by logistics service providers. This is one conclusion drawn by a recent Deutsche Post DHL study “Delivering Tomorrow: Towards Sustainable Logistics,” which Deutsche Post DHL. The study concentrates on green logistics and the future of the industry and identifies key developments for the years to come.

According to the study, the logistics industry will be key to comprehensive carbon reduction efforts in most sectors due to its unique expertise and positioning along the supply chain. Sixty-three percent of business customers believe that logistics will become a strategic lever for CO2 abatement. In addition to its strategic economic importance, logistics will increasingly be seen as essential to achieving lower carbon emissions across the economy. That´s a chance and a challenge as well for logistics service providers: Companies rated best-in-class in terms of environmental, social and governance practices outperform low-sustainability companies by up to eight percent.

Furthermore, logistics will no longer be viewed as a commodity, where offering the cheapest solution rules. As a result, the leading logistics companies of the future will be those that provide sustainable services. The study also shows that significant carbon reductions can already be achieved within the logistics sector without waiting for major technological breakthroughs.

“The logistics industry can achieve significant carbon reduction results today by making distribution networks more efficient, using the right modes of transportation and by managing load capacities and routes more efficiently,”said Frank Appel, Chief Executive Officer of Deutsche Post DHL. “Our aim with the study is to create a more focused debate. The report aims to show how business innovation and green demand can drive a carbon-efficient industry and lead to a low-carbon economy.”

The study also shows that carbon pricing mechanisms will accelerate a market-based dynamic toward more sustainable solutions. Once there is a real price tag attributed to carbon emissions, the environment will be an integral part of investment decisions. The study show that Asian consumers are ready to accept that it may cause higher prices. For example, 84% of consumers in China, India, Malaysia and Singapore say they would accept a higher price for green products — compared to only 50% in Western countries. The sense of urgency regarding climate change is strongest in Asia (India, China), where 70% of consumers asked rated it as one of the world’s most serious problems.

The study is based on in-depth research and contributions from international experts as well as a representative survey of 3,600 business customers and consumers worldwide. It was developed with support from a number of authoritative external experts from such institutions as MIT, Potsdam Institute for Climate Impact Research, University of Singapore and the Technische Universität Berlin along with numerous experts from Deutsche Post DHL. Some of the Group´s customers, including Fujitsu, Henkel, HP, Unilever and Walmart, also contributed to the report.

Download the complete report, Delivering Tomorrow: Towards Sustainable Logistics.