Green logistics is increasingly vital to the climate change response {writer: Piet Coetzer}

The modern economy has become highly integrated at all levels – be it regional, national or global – with a constant flow of products moving to and fro. In the process, the discipline of logistics and the management thereof has become critically important to the health of the economy. It is the arterial network and system that keeps the very lifeblood of the economy circulating.

However, because of inefficiencies, its scale and the extent to which mankind has become dependent thereon, it has become a threat to the planet we inhabit. Consider the emissions impact of all the vehicles we use to transport the products and consumables manufactured throughout the world – from the giant oil tanker to the 50cc motorbike used for deliveries by the local pharmacy.

But it goes well beyond the obvious. There are a multitude of decisions involved in the process of managing our supply chains, which have a direct and indirect impact on the natural environment: from the packaging that is being used, the amount of paper-based documentation utilised, to the maintenance programmes for delivery fleets.

Logistics and transport activities have been identified as having a major impact on the environment in which we all live. For example, excess carbon emissions have changed the environmental landscape by destroying the ecosystem. Indigenous forests have thinned out and changed rain patterns, thus impacting farming and food production.

Logistics and transport have attracted significant legislation at both national and international level. Targets for improving environmental performance have been set by the international community via the Rio, Kyoto and Copenhagen summits.

Decisions made in the management of the supply chain do not only impact on the environment, but often have direct bearing on costs.

Globally, the transport sector was already responsible for approximately 23% of energy-related greenhouse gas emissions in 2004. Road freight transport alone accounted for a quarter of worldwide energy consumption by transport in the year 2000, and emissions of transport in general have increasing at a faster rate than any other energy-using sector.

A good example of a less obvious element in the logistics sector that poses great risk to the environment, is packaging – one of the greatest challenges to environmentally friendly logistics, while also being vital in shipping, storage and real costs involved.

Correct or incorrect packaging has consequences for how much of a product can be stored, how it is stored and/or transported in a given space. This can increase the unit cost if the packaging hinders optimisation of storage space.

Many industries have developed forms of packaging that do all that is required of them in transit, but do not justify the expense of returning them to the point of origin. This packaging is used only once and then discarded.

The principle goes all the way down to the level of individual tins or cartons of food. It is this type of packaging that presents the greatest challenge to logisticians as, increasingly, there is a responsibility for the supplier and the buyer to recover and recycle or effectively dispose of packaging.

A cost- and environment-sensitive transport management structure should pay due attention to elements such as how often vehicles carrying goods travel in one direction, but return empty to base.

Performance monitoring of a transport fleet, to be optimally efficient in terms of both costs and impact on the environment, should take due cognisance of elements such as:

• Kilometres per litre of fuel used;

• Average life of tyres expressed in kilometres;

• Percentage of tyres remoulded or re-grooved;

• The amount of waste lubrication oil generated by the operations;

• Utilisation of vehicle load space expressed as a percentage; and

• Percentage of miles run empty.

Businesses and organisations should consider the extent to which they can save costs and reduce environmental impact by implementing measures such as: driver training, and sensitising them on how their driving habits impact on these factors via fuel consumption; vehicle utilisation in terms of both payload and empty running; preventative maintenance, as poorly serviced vehicles are less fuel-efficient; and how they dispose of used tyre casings and used oil.

Climate change now is considered widely to be the most serious challenge facing humankind.

According to the Intergovernmental Panel on Climate Change in a declaration dating back to 2007, scientific evidence of the relationship between fossil fuel consumption, carbon dioxide emissions and global warming is now “unequivocal”.

Considering the massive role played by the movement of goods along the supply chain in the carbon footprint of the modern economy, the need for green logistics has become essential if humankind is to have any hope of reducing the pace of climate change to manageable levels in order to give it ample room to adapt.

Green logistics, in this context, should be aimed at encouraging all stakeholders to consider the impact of their actions on the environment. The main objective of green logistics should further be to co-ordinate the activities within a supply chain in such a way that beneficiary needs are met at ‘least cost’ to the environment.

In this, reverse logistics can play a pivotal role. Traditionally, it is defined as the process of moving a product from its point of consumption to the point of origin to recapture value or ensure proper disposal. It is one of the fastest developing fields of business logistics, with the result that it is changing continuously in scope and significance.

Reverse logistics includes activities to avoid returns; to reduce materials in the forward system so that fewer materials flow back; and to ensure the possible reuse and recycling of materials.

It is important that supply chains are handled in a responsible manner and that they do not end up causing long-term damage to the environment.

In the past, “cost” has been defined in purely monetary terms, whereas it can now be understood as the external cost of logistics associated with climate change, air pollution, dumping waste (including packaging waste), soil degradation, noise, vibration as well as accidents.

Green or sustainable logistics is concerned with reducing environmental and other negative impacts associated with the movement of supplies. Sustainability seeks to ensure decisions made today do not have an adverse impact on future generations.

Green supply chains seek to reduce negative impact by redesigning sourcing, distribution systems and managing reverse logistics so as to eliminate any inefficiency, unnecessary freight movements and the dumping of packaging.

What to do

It is becoming increasingly important that businesses and organisations not only formulate environmentally green logistics management plans, but also put in place the necessary monitoring mechanisms to ensure compliance to the ever developing regulatory environment – which itself is becoming increasingly punitive in case of non-compliance – and to ensure long-term sustainability of operations.

Once a green logistics management plan is in place, it is important that it is monitored formally through an auditing process, which will identify corrective action to be carried out from time to time.

There are hidden benefits to be reaped from such green logistics management plans, such as greater efficiency or even straightforward business opportunities (for example, commercial utilisation of waste) from adopting alternative methods of controlling or eliminating the pollution risk.

It is important that top management engages in this process and reviews the performance of the system formally on a regular basis. This review may lead to the policy or objectives being changed or updated in the light of audit reports or changes in circumstances.

This process should encourage a commitment to continuous improvement in environmental management; and ensuring organisations and businesses are not exposed by failing to meet their legal and moral obligations.