Alexandr Khomich, President & CEO at Andersen.
The logistics sector stands at a pivotal junction, facing a now-or-never moment. With rising sustainability pressures and radical technological shifts, businesses must transform operations to meet stringent emissions regulations and growing customer expectations around eco-friendly deliveries.
The Sustainability Imperative In Logistics
Logistics is under growing pressure to adopt sustainability measures. Key regulations are mandating reductions in transport emissions, notably in major markets such as the EU. Under the Paris Agreement, companies must cut carbon emissions by 55% by 2030 compared to 1990 levels to meet climate targets.
By 2030, the global logistics market will reach a value of $570.9 billion compared to $261.5 billion in 2022, according to Vantage Market Research. With exponential business growth comes immense pollution. DHL states that approximately 80%-90% of a product’s emissions come from the supply chain, which accounts for around 60% of all global carbon emissions. On average, a truck that travels approximately 120,000 miles per year emits 223 tons of CO2. Presently, over 6.2 million trucks are in operation across the EU, responsible for transporting 77% of all land freight in the region. Therefore, strategic sustainability efforts are indispensable.
As the carbon price is projected to reach $50-$100 per ton by 2030, non-compliant logistics providers risk facing substantial financial penalties. Customer preferences are also shifting, as eco-conscious shippers and consumers increasingly favor low-emissions providers. For instance, the Descartes Systems Group’s 2023 Home Delivery Sustainability Report revealed that over 60% of consumers express strong interest in eco-friendly delivery methods. Moreover, 59% would take action if dissatisfied with retailers’ sustainability efforts.
Inactive companies may struggle with declining competitiveness and profit margins. In turn, leading providers who optimize routes, upgrade fleets and integrate green practices can gain advantages as policies tighten.
Therefore, modern companies can no longer ignore sustainability if they want continued success.
Are You Ready For Sustainable Logistics?
The path to sustainable logistics is clear, with guideposts like European regulations, emissions reduction targets and compliance deadlines. Success is easily achievable with green fuels, eco-friendly packaging, robust recycling protocols and more.
Yet, understanding each component alone is not enough to create resilient structures for the future. Logistics companies should integrate all elements into a cohesive strategy that incorporates sustainability into business workflows, decisions and culture. Robust software solutions play a crucial role in this.
Here is a short checklist to determine if your business is keeping up with the transformation. Ask yourself the following questions:
• Does our infrastructure enable sustainability?
• Can we optimize our network capabilities?
• Do we have tools to track progress on our commitments?
• What planning tools are required to update our fleet?
• Is a transformation roadmap established?
• Who are our technology partners?
Briefly, are we truly prepared for the future?
Even if you have a clear transformation roadmap, it needs regular recalibration as technology and policy continuously evolve. Constant assessment and correction will prevent you from losing time or direction.
Steps To Greener Logistics: An Action Plan
In her recent ICT&Logistiek speech, Hanna Rabotkevich, Head of Logistics Technologies at Andersen, addressed industry concerns and proposed a strategy to enhance sustainability while ensuring business growth. Here are the key takeaways:
• Update your infrastructure as it offers ripe potential for emissions cuts and freight rate control;
• Modernize your fleet. Trucks with state-of-the-art software and IoT sensors maximize efficiency and streamline routes. Follow Euro 7 updates to acquire vehicles meeting this standard as soon as they become available;
• Upgrade legacy systems or build custom solutions from scratch. To achieve this, partner with experienced software professionals who can create digital platforms capable of maintaining competitive pricing;
• Develop innovative operational products like TMS featuring driver monitoring through tachographs;
• Implement sustainability goals and progress tracking to measure success (e.g., reduce emissions by X% over Y years). This is essential, as you cannot control what you cannot measure. Moreover, this will help you provide accurate information to regulatory bodies responsible for taxation;
• Install strong analytics tools like dashboards for accountability;
• Offer your clients green shipping options with modern eco-friendly vehicles. Their higher costs must reflect environmental savings;
• Strategically integrate IT, telematics, IoT and business operations for consistency;
• Optimize logistics networks leveraging real-time visibility, algorithms, simulation and load consolidation to reduce mileage;
• Model major fleet transition investments thoroughly for smooth adoption of cleaner trucks, vans and other vehicles.
Implementing these initiatives today presents substantial opportunities for pioneers to capture a larger market share. Companies that don’t take steps towards modernization risk becoming too expensive for their customers and, as a consequence, losing them.
Getting Started With Expert Partnerships
Attempting complex technology changes without professional guidance can lead to inefficient resource use and inconsistent progress. However, you don’t have to maintain your IT department; an experienced software company can handle all the necessary operations for you.
Leading software agencies have Research and Development departments and advisory boards, and thus are fully aware of modern logistics trends. Their employees are well-versed in innovations like the IoT, fleet management systems, data analytics, AI, ML, blockchain, digital twins and more. They know how these advancements benefit eco-friendly supply chains.
By prioritizing upgrades in infrastructure, electrifying fleets, reconfiguring networks and implementing efficient tracking, IT professionals match the unique needs of logistics businesses and help them achieve maximum impact. Their guidance reduces wasted efforts, allowing leadership to focus on business priorities. Such partners can also objectively weigh innovations and mitigate technical risks.
In essence, by partnering with a top-notch provider, you enhance sustainability and make your business flourish at the same time.
To create an effective and successful sustainability strategy, businesses should prioritize meeting government compliance by 2030, establish long-term technology partnerships, adhere to budget constraints, maintain high-value logistics services, ensure measurable environmental impact and implement checklists for strategy execution. The focus now isn’t just on competition with the company next door; it’s about taking the necessary steps to secure the continuity of your business. It’s also a reflection of our collective responsibility towards the planet and future generations.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?