E-COMMERCE WILL DRIVE ELECTRIFICATION, EFFICIENCY AND ECO-FRIENDLY MATERIALS IN SUPPLY CHAINS, FINDS NEW DHL RESEARCH

• Most  Americans have greater trust for companies with stronger environmental credentials and are willing to pay more for greener products
• Growth of e-commerce presents a historic opportunity to reengineer supply chains and invest in green solutions
• Opportunities and challenges for environmental sustainability identified in five principal areas of e-commerce supply chain
  

E-commerce is fundamentally changing approaches to supply chain sustainability in the United States, according to new research published by DHL, the leading global express and logistics company. A new white paper – “ECO-mmerce: How online retail can build the sustainable supply chain of tomorrow” – argues that the rapid growth of e-commerce is bringing immediate opportunities to reduce emissions within the supply chain while also challenging retailers, logistics providers and policy-makers to collaborate and innovate to address the risks of climate change.  

A DHL / Morning Consult survey of U.S. consumers in May 2021 found that more than half of respondents (54%) indicated their online shopping habits increased during the COVID-19 pandemic,  while the majority (60%) said they are willing to pay more for environmentally friendly products or services. 54% stated they put more trust in a company based on public commitments to environmental sustainability with carbon emissions, green energy, waste, alternative fuels and sustainable packaging identified as the five most important factors in helping the environment. The survey results reflect the influential role that supply chain sustainability will play in the competitiveness of e-commerce businesses in the future.

DHL’s white paper, produced with the support of FINN Partners’ Global Supply Chain, Logistics & Transportation Practice, and incorporating insights from executives of DHL’s express, supply chain and e-commerce business units in the U.S., looked in detail at the five segments of the e-commerce supply chain that are most exposed from a sustainability perspective – the last-mile, first and mid-mile, warehousing, packaging and returns. It highlighted that the greatest impact is likely to be derived from three key areas of focus: cleaner energy, through more electrification of transportation fleets and warehousing operations; increased efficiency, supported by data and technology; and eco-friendly materials, particularly in packaging. E-commerce is already having a net positive impact on the environment compared to traditional retail in a number of areas, such as replacing multiple passenger car trips with single round trips with delivery vans and accelerating investments in greener transport and warehousing technologies. In other areas, the potentially negative impact of some trends, such as a proliferation of smaller warehouses closer to customers, is being offset by other effects such as the optimization of retail networks and the introduction of greener energy supplies and automated equipment. The white paper also addresses areas, such as aviation, electric vehicle charging infrastructure and packaging that will likely require further technological innovation or support from policymakers in order to totally eliminate emissions.  

“The rise of e-commerce has been further accelerated by COVID-19, and it is now well established as a significant driver of growth for DHL Express in international business-to-consumer and business-to-business shipments as we emerge from the pandemic,” said Greg Hewitt, CEO, DHL Express USA. “At the same time, the last 18 months have also underscored the importance of resilience and sustainability in the global supply chain. Our e-commerce customers have already demonstrated their ability to build innovative, disruptive businesses and to be one step ahead of consumer expectations. This research provides practical insights for those e-tailers that wish to lead on environmental issues on where they should focus their energies within their supply chain. As a logistics leader that has committed to ambitious environmental targets, it also supports our own understanding of how we can best support them on that journey and where our investments in green solutions and technologies, such as electric vehicles, can be most effective.”

“E-commerce is fundamentally reshaping our customers’ supply chains, challenging them to redesign their transportation and warehousing networks in order to accommodate customer demand across multiple channels, address changes in trade and inventory flows and be more responsive to the market,” said Kraig Foreman, President of eCommerce, DHL Supply Chain North America. “At the same time, we at DHL Supply Chain see this as a historic opportunity to build more sustainable supply chains from the bottom up, by reengineering processes with efficiency and emissions reductions in mind, taking advantage of new, greener technologies at all stages of the order cycle and exploring innovative ideas in areas such as packaging and the circular economy.”

In March 2021, Deutsche Post DHL Group announced a new sustainability roadmap. Reiterating its ambitious target of net zero transport-related emissions by 2050, the company also committed to invest EUR 7 billion in green solutions, expand its fleet of electric vehicles to 80,000 worldwide and increase the share of sustainable fuels in its long-haul transportation by 2030. In the United States, DHL Express launched an electric cargo bike pilot in Miami in 2020 and has continued to deploy alternative and electric vehicles in its last-mile delivery operations, with more than 10% of its fleet running on alternative fuel sources, including a 100% green fleet in Manhattan. The company’s DHL Supply Chain contract logistics unit procures 100% of the energy used in its warehouses in the U.S. from renewable sources and has introduced green solutions and reporting tools to help customers reduce the carbon footprint within their supply chain. DHL eCommerce Solutions launched a new carbon neutral Expedited Max domestic package delivery service in 2021. And its freight forwarding unit DHL Global Forwarding decarbonized all Less than Container Load ocean freight shipments worldwide from January 2021.