Sustainable Logistics

Published on in Logistics of the future, Sustainability, Trends

Logistics and sustainability – what seems to be an impossible combination is actually anything but. There are plenty of ways of organizing and adapting logistics processes to be sustainable; we just have to start doing them.

Additionally, customer demand for sustainable, efficient solutions for warehouse logistics technology is steadily increasing. Together, we can make the processes in production facilities and distribution centers, as well as for the last mile and in stores, a lot smarter and a lot more efficient. In this blog post, we’ll get to know sustainable logistics from various perspectives and dive deep into its complex world. We will:

  • define terms such as sustainability, sustainable logistics and green logistics
  • explain how more sustainable logistics is good for business
  • show you what you can do to make your logistics processes more sustainable
  • demonstrate how technology and automation can help

Table of contents

1. What exactly is sustainability?
    The 3 levels of sustainability
    The role of sustainability in logistics

2. What is sustainable logistics?
    Sustainable logistics vs. green logistics: What’s the difference?

3. 4 reasons for more sustainability in logistics

4. Challenges of sustainable logistics

5. Using automation, software and smart work stations to combat the skilled labor shortage in logistics

6. Sustainable logistics measures
    Sustainable pharmacies
    Warehouse Modernization – Retrofitting for Your Logistical Future
    Digitalization Enables Sustainable Logistics

7. Sustainable urban logistics
    Last Mile Logistics

8. Research on sustainability in logistics 

9. The most important trends in green logistics     

What exactly is sustainability?

Sustainability is a hot topic. Reducing waste, using renewable energy and recycling are all well-known and are often practiced as part of greener living. But what else is part of sustainability? Sustainability means much more than minimizing one’s CO2 footprint.

Sustainability means being able to satisfy the demands of the present without limiting the opportunities future generations have. A sustainable system should operate in a way that is self-sustaining and that can be regulated through natural means.

As you can see, sustainability is much more than just being environmentally friendly. At a company, sustainable development has to happen on three equal levels in order to successfully function:

  • Environmental protection
  • Social responsibility
  • Risk and reputation management
Close-up image of a person holding a plant growing out of the soil.

The 3 levels of sustainability

Environmental, social and governance form the three levels of sustainability in the ESG framework, which serves as a set of guidelines for doing business sustainably. All three levels of the model are interconnected and given equal priority because sustainable development is only possible when a balance is found between eco-friendliness, responsible corporate governance and social responsibility.

The 3 aspects of sustainability in detail:

Icon ESGs environment

ENVIRONMENT
The environmental aspect of sustainable development refers to careful, proactive interactions between companies, the ecosystem and Earth as a whole. Natural resources should only be used at or below the rate they can be regenerated, preserving them for the future.

Icon ESGs social

SOCIAL
The social aspect focuses on humans. Social responsibility means providing equal opportunities and a safe working environment while respecting labor law and human rights and supporting opportunities for people to reach their full potential.

Icon ESGs governance

GOVERNANCE
The corporate governance aspect focuses on topics such as remuneration of management, tax strategy, fair competition, donations, diversity in managing boards and supervisory boards, and corruption.

The role of sustainability in logistics

Worldwide, over 100 billion packages are shipped each year

Global freight transport is responsible for 5.5–11% of the total emission of pollutants

Every third transport vehicle on the street is empty

These 3 facts show that sustainability is a major topic in transport and logistics due to the industries’ high impact on the environment and on Earth’s ecosystems. Transporting and storing goods causes significant CO2 emissions while contributing to air pollution, while excessive or non-recyclable packaging also creates pollution and is inefficient. The energy used by vehicles, warehouses and other infrastructures cannot be ignored, either.

These are only a handful of examples that show how logistics affect our ecosystem. To counter these effects, interest in sustainable logistics and green logistics is growing. Acting sustainably and creating responsible value chains benefits the environment while lowering costs, ensuring customer satisfaction and creating new market opportunities. But what exactly is sustainable logistics? What does it encompass and how is it different from green logistics? Read on to find out the answer to these questions.

Packages are being conveyed on a conveyor
More than 100 million packages are shipped worldwide each year, and this number continues to grow.

What is sustainable logistics?

Sustainable logistics refers to how logistics processes are planned, implemented and optimized. The goal is to make value chains more sustainable by integrating the three levels of sustainability into all aspects of logistics, including transport, storage, packaging and waste management. Over the course of the entire transport and logistics process, the goal is to minimize the impact on the environment, use resources efficiently, lead the company responsibly and consider social aspects.

Let’s look at an example of how to integrate sustainability into logistics on these 3 levels:

Icon ESGs environment

Environment

  • Reduce CO2 emissions
  • Minimize/Optimize energy use
  • Use environmentally friendly technologies, methods of transport, packaging materials and fuels
  • Use recycling or reverse logistics
  • Reduce packaging material
  • Minimize pollution and waste produced by logistics processes
  • Protect ecosystems
Icon ESGs social

Social

  • Work conditions: fair pay, occupational health and safety and ethics standards along the supply chain
  • Promotion of human rights and workers’ rights
  • Responsible treatment of employees and suppliers
Icon ESGs governance

Governance

  • Appropriate, efficient risk management
  • Positive corporate culture
  • Avoid conflicts of interest in advance or compensate for them
  • Ethical, value-oriented management
  • Transparent, accurate accounting
  • Prevent corruption
  • Independence of any supervisory body
  • Prevent anti-competitive practices

Sustainable logistics vs. green logistics: What’s the difference?

When discussing sustainability in logistics, the term “green logistics” often comes up. Although sustainable logistics and green logistics follow similar goals, each has a slightly different focus.

While sustainable logistics places equal focus on environmental, business and social aspects, green logistics mainly deals with taking steps to minimize the impact that logistics and delivery have on the environment.

Sustainable logistics is an umbrella term that includes different aspects of sustainability, while green logistics is a part of sustainable logistics that focuses on the environmental aspects of logistics processes.

A depiction of a factory comprised of trees

4 reasons for more sustainability in logistics

The integration of more sustainability in logistics offers advantages on all levels of the sustainable development goals. Sustainable logistics is not only good for the environment, but for creating economic and strategic advantages as well.

The following 4 reasons show why we need more sustainability in logistics:

1. Sustainable logistics protects the environment
Sustainable logistics means confronting ecological challenges and protecting both the Earth and the people who live on it. Robotic solutions and intelligent software tools make transport routes inside and outside the warehouse more efficient, reducing CO2 emissions and saving energy. Additionally, the logistics industry can make a significant contribution to environmental protection by using resources wisely and avoiding waste production. Using sustainable packaging materials or retrofitting systems are two examples of this.
2. Sustainable logistics saves on costs
Sustainable logistics makes actions profitable and efficient over the long run. Optimizing logistics activities, along with warehouse and distribution processes, lowers operating costs while saving energy and personnel costs. At the same time, intelligent transport planning does its part to help the environment by reducing the number of empty miles driven. Using warehouse space efficiently and implementing intelligent warehouse management systems also helps to lower storage costs over the long run.
3. Rising customer demand for more sustainability
To survive in today’s market, integrating principles of sustainability into business is vital, as public knowledge of environmental issues and social responsibility has grown significantly. Customers prefer companies who produce and supply their products and services sustainably. Companies that provide transparency gain new customers, build up solid relationships with suppliers and win long-term loyalty from current customers.
4. Legal requirements mean more sustainability in logistics
Governments and authorities at the national and international levels are introducing increasingly stringent regulations and standards in order to promote sustainable economic practices. Integrating sustainable logistics practices means you will be able to adhere to the increasing rules and regulations, keep abreast of legal consequences and continue to do business without having to constantly catch up to new legal demands.

Sustainable logistics is an important step in making the logistics industry fit for the future and promoting its sustainable development.

Sustainability offers many benefits
Sustainable logistics is not only good for the environment, but also for the economy.

Challenges of sustainable logistics

The challenge is replacing the foundation while business goes on as usual – without letting the house collapse.

– Federation of German Industries (BDI)

One thing is clear: Sustainable logistics has plenty of major advantages. However, logistics companies looking to take measures to improve their sustainability are often met with significant hurdles, including:

Customer requirements result in inefficient shipping methods
To put it bluntly, logistics is not sustainable because customers are not sustainable. For consumers, logistics is a black box. They expect deliveries to be made within 24 hours and to be free to boot. It’s difficult to implement environmentally friendly logistics policies when consumer demands prevent loads from being consolidated or transport streams from being used optimally. The result is inefficient shipping methods, which lead to increased emissions, the release of greenhouse gases and added costs.
Insufficient infrastructure for green freight transport
At the same time, logistics – especially transport logistics – is still in its infancy when it comes to using environmentally friendly transport methods such as electric vehicles, low-emission ships or alternative fuels. So far, freight transport has been dependent on fossil fuels. Effective and economically viable alternatives need to be found and a stable infrastructure must be built so that lasting change can be made in this area.
Selecting appropriate suppliers for sustainable value chains
Sustainable logistics requires cooperation between different actors along the value chain, from producers and transport companies to governments and consumers. Along the supply chain, there is demand for transparency when it comes to sustainability. In order to honor your sustainability commitments, you might have to negotiate with your partners or find new suppliers, which costs time and resources. The challenge is finding partners who have the same values you do and who want to contribute to transforming logistics into sustainable logistics.
Taking the leap toward sustainability
When faced with the opportunity to make their logistics more sustainable, some managers fall back on the old adage to never change a running system. The shift toward sustainable logistics can mean establishing new processes, re-training employees or implementing new systems. It can also mean changing the corporate culture or creating a new one. Sustainable change places demands on valuable resources and has a long implementation process, both of which can be difficult for companies to manage due to the current labor shortage.
High investment costs hinder sustainable logistics
Implementing more sustainable logistics practices can result in high costs. Closing the gap between sustainability and the current state-of-the-art in logistics means investing in researching and developing improved solutions. The challenge here is to create and implement environmentally friendly solutions without impacting efficiency or profitability. Increased costs that result from prioritizing ecological aspects pose a major financial risk.

To achieve more sustainability in logistics, we need innovative approaches, sustainable transportation, sound infrastructure, investments in research and development and more tolerance for and acceptance of consumers.

So, what can you do now to take a step in the direction of sustainable logistics? Read on to find out.

Special graphical effects transform a moving truck transforms into a futuristic digitalized truck concept
Sustainable logistics demands an innovative approach, including sustainable transport as well as more tolerance and acceptance from end consumers.

Using automation, software and smart work stations to combat the skilled labor shortage in logistics

The logistics industry has been hit especially hard by the current labor shortage and its effects are being felt more and more widely, from decreasing revenue to rising personnel costs and an increased workload for the remaining staff. These developments are neither socially nor economically sustainable. Despite a good order situation, the company’s ability to operate is negatively affected. There are various causes of the labor shortage; an aging society and lack of qualifications are just two of them. However, one of the heaviest hitters is the enormous demographic shift.

Here are 3 options for staying sustainable in the face of the labor shortage:

Fully automated systems
Partial automation to support current personnel
Digitalization for organizing processes efficiently and optimizing human effort

Intelligent robotic solutions, ergonomic work stations, autonomous mobile robots and smart software help you keep working efficiently even when lacking personnel. Solutions such as these make processes more efficient and more flexible while taking the strain off employees by doing the heavy lifting for them.

We use Pick-it-Easy Robot to take repetitive tasks off our employees, allowing them to concentrate on more complex aspects of the distribution process.

– Todd Kleinow,
Vice President Strategic Distribution and Operations, McKesson

Along with fully automated processes, partially automated and ergonomic work stations play a major role in fighting the shortage of qualified personnel. Machines complement human abilities, allowing people to do meaningful work that creates value.

Software tools optimize and provide an overview of processes in the warehouse, allowing personnel to be used in a way that makes sense. Intelligent software is the key for connecting all components with one another. Software can also provide sustainable support when it comes to maintenance. For example, sustainable software organizes maintenance processes to make them more productive and helps make maintenance decisions, thus saving spare parts.

Robots and humans work hand in hand in sustainable logistics
Automation supports sustainable logistics and counteracts the shortage of qualified employees.

Sustainable logistics measures

There are many innovative approaches organizations take to make the logistics industry more sustainable. For example, we at KNAPP do our part by extending the product life cycle of our system components. We also use artificial intelligence to support fully automatic empties management.
These examples show just a few of the ways logistics can be made more sustainable. In the following blog post, we would like to introduce a few services, products and changes that can be made to contribute to a long-term, eco-friendly transformation of logistics in different industries.

Sustainable pharmacies

By investing in sustainable and durable automated picking systems, pharmacies can protect the environment and operate efficiently at the same time. Automated picking systems save costs over the long term as they consume less energy. Thanks to the use of high-quality materials and intelligent technologies, the systems are also especially durable.

ApoStore picks a medicine.
The patented Greenline Technology reduces energy consumption and costs.

Beatrix Ullrich, owner of the Schwarzwald‑Apotheke pharmacy, chose the A2000 by ApoStore ten years ago. Since then, the automated picking system has run reliably and with ease. Recently, she took the opportunity to overhaul the entire picking system after its typical life cycle in the sector had run out. This alternative is significantly more sustainable than disposing of the old system and buying a new one. During the overhaul, the Schwarzwald‑Apotheke was able to continue operating without interruptions.

Another aspect that characterizes the automated picking systems by ApoStore is their highly efficient energy use. Patented Greenline Technology makes it possible to switch the electrical components of the system to standby mode, which considerably reduces energy consumption. This is beneficial in the long run because it saves resources, reduces costs and slows down wear and tear on the electrical components.

Even if the systems reach their twilight years after many years of proven durability, they are sustainable supporters for pharmacies to the very end – 98 percent of the materials are recyclable.

0%
recyclable

Sustainable investments allow pharmacies not only to contribute to environmental protection, but also to keep ahead of the competition and to gain customer trust.

Warehouse Modernization – Retrofitting for Your Logistical Future

Nothing lasts forever, not even warehouse logistics. A look at the life cycle of the components in a system and the operating software and hardware quickly shows the managers of logistics centers how old their warehouse really is. Then they face questions such as: Should I invest in a new warehouse or modernize my current one? Should I continue to work with my old system and risk not being able to obtain spare parts? Or does a warehouse retrofit make more sense?

Man steht für einer Grafik mit einer absinkenden Kurve

Due to the uncertain market situation, rising costs for storage space and raw materials as well as the desire for more sustainability, many companies are opting for the latter. But what exactly is the difference?

Revitalization
Revitalizing a system means only replacing individual components, such as electrical or mechanical components, to ensure the warehouse continues to operate over the short or medium term.
Warehouse retrofit = modernization and revitalization
Along with upgrading mechatronic, electrical and mechanical components, a retrofit requires rethinking the entire warehouse design. Retrofitting takes your current and future business requirements into account to provide maximum business continuity and performance.

Retrofitting is more than just upgrading the hardware and software or replacing old parts. Processes and components are checked and a new solution is designed to meet your current and future requirements. Experienced retrofit experts make use of existing space, steel and other resources. This not only saves costs, but also has a positive effect on your CO2 balance. In conclusion, a well-prepared and well-thought-out retrofit allows you to meet the demands of your sector, profit from greater system reliability and an unlimited supply of spare parts, and remain sustainable for the future.

Digitalization Enables Sustainable Logistics

Sustainability, digitalization and automation. These terms are the big three of the modern value chain. Whether in production, warehouse management, in transport or on the last mile to the customer, many processes are already much more efficient and transparent thanks to automation and digitalization in the supply chain. But does this make them more environmentally sustainable?

Sustainability in logistics may not be a new idea, but it has become an influential megatrend over the past years. Stricter requirements and environmentally conscientious consumers are forcing companies to focus on more sustainability. However, implementation thus far been focused on the most obvious factor that impacts the environment: transport. The switch to electric or hybrid fleets is in full swing at many companies, as is the implementation of digital tools that optimize transport loads and routes.

Individual software solutions can address sustainability, but they alone cannot reduce environmental impacts over the long term. In this blog post, we show you not just a few examples of sustainability through digitalization, but also how these solutions interact to provide end-to-end sustainable logistics.

Sustainable urban logistics

Last Mile Logistics

The last mile refers to the last leg of a delivery made to the consumer. This area of logistics frequently includes many hurdles that require significant resources. Perfect planning and flexibility can make the difference between success and falling flat. Sustainability in the last mile more important than ever because these deliveries come with high CO2 emissions, which is why having greener last mile logistics is an increasing competitive factor.

Online Food Retail, Food, Lebensmittelhandel, Zustellung, Home Delivery

What can you do now to make your last mile logistics more sustainable? We present 4 strategies for more sustainability on the last mile:

Micro Fulfillment Center (MFC)
Small, automated solutions for urban areas shorten delivery runs dramatically by being close to the consumers. Even if deliveries are made with conventional vehicles, micro fulfillment provides an opportunity to reduce traffic and CO2 emissions in cities. What’s more, the automation solution is connected directly to a supermarket and uses its existing infrastructure.
Planning efficient routes
An important resource for increasing sustainability on the last mile is a tool for optimizing delivery routes. These tools find the best possible, most eco-friendly route to the consumer. What’s more, the delivery route is flexibly adapted for CO2 optimization and up to the moment traffic.
Error-free order fulfillment
The processes in the warehouse and error-free order fulfillment are extremely important when it comes to returns and customer satisfaction. Warehouse employees know which bag to place a certain item into when they receive clear, exact instructions from the system. If robot systems are used, they must be able to handle groceries delicately; equipped with AI, they learn to pick more and more foods and place them directly in the correct bag. The consum-er receives fresh groceries in the best quality.
Intelligent fulfillment networks
By combining all business models, numerous advantages are gained for both food retailers and consumers. MFCs, large central fulfillment centers, classic brick and mortar stores and automation solutions at the point of sale offer high flexibility with respect to order quantities and volumes. The consumer can se-lect which shopping model is the best for them.

Research on sustainability in logistics

External influences such as COVID-19, climate change, urbanization or geopolitical events and even megatrends are changing logistics at a rapid pace. Innovative technologies will make the difference in crisis-proofing value chains. In research, the search is on to determine the measures that will make the overall supply chain more sustainable and resistant to crises.

Current research projects at the TU Berlin are dealing with novel logistics solutions and supply chains for development in African countries. In the research field “Smart Technologies and Digital Logistics Models”, methods involving artificial intelligence are used to predict traffic patterns and to control mobility. The research area “Sustainable Logistics in Traffic and Value Chains” investigates feasible concepts to transform mobility while considering impacts on energy.

Current research at MIT (Massachusetts Institute of Technology) is now focussing on successfully dealing with extreme changes in the supply chain. To the same degree, research in the past three years has focussed on supply chain sustainability (SCS). Even though the individual elements of the SCS are undergoing change, sustainability in supply chains is gaining in significance. Here are a few research projects on the topic: “Digital Twins: Warehouses of the Future”, “Warehouse of the Future”“ or “Sustainable Supply Chains”.

Logistics has a considerable influence on both the environment and climate protection. The contribution that it can make with new ideas for modal shifts, increased efficiency as well as by using new technological solutions are far from insignificant. Research in logistics is therefore vital for making rapid progress in the area of sustainability overall

Increased efficiency and sustainability happen through logistics research

We are the right partner for sustainable logistics solutions. As a Value Chain Tech Partner, we want to take responsibility for the environment and society together with you. We can make a significant contribution by designing processes efficiently and intelligently in production facilities, distribution centres as well as on the last mile and in the branches. That is why we are continuously working to develop ever more sustainable products that meet these requirements.

Are you interested in sustainable and efficient solutions or do you want to learn more about the topic of “sustainable logistics”? We’re happy to tell you more!

Leonie Scharf
Content Creator
Which trends are shaping the logistics sector? How can new demands be translated into individual automation solutions? This is the topic that Leonie blogs about and researches for you.

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