What we buy: three strategies to reduce the carbon footprint of transporting your order

Practically two years after the start of the health crisis due to COVID 19, many things are here to stay. We have seen the advantage of multitasking from home and have put new habits into practice, but if one thing could stand out from the others, it is that we have adopted e-commerce as one of our first options when shopping. From ordering the supermarket through an application, to requesting the shipment of what we liked on a website, e-commerce is part of a logistics and service network that, although it has grown tremendously, requires special attention when it comes to sustainability. In this article, we will present a brief update of one of our previous posts on online trading to then go into detail about one of its most important implications: the transport of products and goods and what companies can do to make it more environmentally friendly.

A changing landscape

In August 2020, we published an article in which it was mentioned that since then an increase of 60% in online purchases in Mexico would be expected in the following months, according to studies conducted by the International Data Corporation. Additionally, at that time, it was identified that the products and services that showed significant growth during the weeks of confinement were related to health and well-being, food, entertainment (especially subscriptions to digital streaming services) and electronic equipment. How have we seen these statistics evolve, especially during 2021?

According to information presented by PayU in its report “Latin America E-commerce, Evolution and Trends (2019-2021)”, e-commerce during 2020 in Mexico reported sales of 368 million dollars and predicted that sales of approximately 410 million dollars will be recorded in 2021. This means an increase of around 11% in one year. On the other hand, in recent months there has been a change in the preference for goods and services, these being those that stopped being purchased by consumers. Examples of the above are those related to physical experiences, for example, restaurants, shopping in malls, and entertainment. These findings about consumer behavior over the past year suggest that, although people are increasingly prepared to make their purchases physically, the need for excellent online sales platforms will also increase, as well as for reliable and, above all, sustainable delivery systems.

Emissions logistics

Formerly we have talked about the importance of addressing sustainability throughout a company's supply chain, not to mention especially those related to downstream transport and distribution. This includes transporting products from the site where they were manufactured or assembled to multiple distribution points, and from distribution points to their final destination. For e-commerce and the delivery of associated products, this is a constant. We commonly notice in tracking systems the location of the products we buy, going from “it's in the facility” to “it's on its way” and finally “delivery complete”. This whole process has an associated carbon footprint, since trucks that usually run on fossil fuels are required to complete the order. According to data from the Environmental Protection Agency, an order with a shipping cost of around 100 pesos has a carbon footprint of approximately 7 kg of CO2. To these figures, we have to add that approximately 5.5% of global emissions are due to cargo transport and distribution, with more than half of this due to land transport. Although this last data does not exclusively include the delivery process of our online purchases, it is a figure that integrates different environmental challenges that the package you are waiting for can help solve.

Innovation in logistics for more sustainable deliveries

In the previous article, we also mentioned that it's important to work on cleaner deliveries by optimizing routes. There are different variables and factors that determine how much impact a delivery generates for a given route. Some of these are related to the way in which the means of distribution are used, others with what means of transport it is used to carry something from one point to another or even with the same content being transported. What are some of the challenges for optimizing routes and what can we do to reduce climate impact?

Empty miles

Empty miles are known as those occasions when a means of transport or distribution follows a specific route for the delivery of merchandise and once the delivery ends, you must return to your point of origin completely empty. This problem affects the company (which does not receive any type of income), consumers (to whom the cost is often transferred) and of course, the environment. There are multiple innovative initiatives that seek to connect products waiting to be delivered with transport or distribution units that do not require returning to their starting point. Some of these initiatives have proven to generate savings of millions of dollars and thousands of tons of carbon dioxide. In many cases, the destinations do not completely match, but these initiatives definitely make it possible to mitigate a problem of great magnitude.

The tonnes-kilometers

A very important variable to consider in logistics systems is the amount of emissions generated for each ton of product that moves over a kilometer. This variable consists of a transport emission factor for which the greater the weight or the longer the distance traveled, the greater the carbon footprint. How can we innovate to modify both the weight and the distance of certain merchandise? There are projects in which, for example, companies transport the components of the shampoo, but without water. This allows them to transport a certain volume of product with much less weight (the shampoo is composed of around 80% water) over long distances to distribution points where the mixture is finally completed. On the other hand, there are already different companies with projects to fulfill local orders through applications or the internet. Eating locally produced food, for example, will avoid complex transport and distribution routes, allowing our breakfasts, lunches and dinners to have a lower carbon footprint.

If it's faster, it's more polluting

Another factor that needs to be taken into account is the speed at which an order is required to be delivered. On many occasions, something we buy can come from far away, having to be transported initially by plane or ship and then by truck or train to distribution points. In this equation, the advantage of using flights or trucks is time savings. This means that they are good options for almost immediate deliveries. On the other hand, the disadvantage is that in terms of their capacity to transport goods, they generate much more greenhouse gas emissions. Unlike planes and trucks, transportation by ship and train tends to be slower, generating fewer emissions per unit transported. To provide more clarity, in terms of emissions per tonne-kilometer, transport by ship generates 97% less emissions than air transport and transport by train generates 90% less emissions than transport by truck. In this case, it is possible to innovate in inventory planning systems. Companies like Ralph Lauren have studied the behavior of their consumers to fill their merchandise months in advance by sending it by ship, transporting it to their distribution points and finally meeting the needs of their customers on time.

These and more are strategies that companies must take into account so that those things we buy online or order have a lower climate impact, especially if online shopping trends continue to rise. There are definitely many other challenges to solve around the products we consume, some of them being the recycling and reduction of packaging, the implementation of circular delivery models (you can read more about the circular economy here), the efficient use of energy and, of course, using means of transport that run on clean energy. But being more aware of what we order, in what presentation, where it comes from and how it is transported to us is an important step as a consumer to be a more active part of the supply chain and its environmental footprint. If you want to amplify the information we presented about the possibility of cleaner transport, we invite you to share this article.

Ángel Estrada and Juan Felipe Arango (2021), “Consumption grows in Mexico at the end of 2021", https://www.ey.com/es_mx/strategy/consumo-en-mexico-2021

IdConline (2020), “E-commerce platforms during quarantine”, https://idconline.mx/corporativo/2020/06/01/las-plataformas-de-e-commerce-durante-la-cuarentena

Mireya Cortés (2021), “$410 million in e-commerce sales forecast to close in Mexico”, https://cio.com.mx/pronostican-cierre-de-ventas-en-e-commerce-por-410-millones-de-dolares-en-mexico/

Yossi Sheffi, Edgar Blanco (2018), “Balancing Green. When to Embrace Sustainability in a Business (and When Not To)”