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Global ecommerce is growing rapidly with no indication of slowing down. In the Netherlands alone, 576 million packages were transported last year. But as ecommerce grows, so does its environmental impact. Vans drive back and forth to the homes of consumers, while airplanes and trucks supply the distribution centres. These increasing transport movements are clogging roads, polluting the air and are accompanied by high carbon emissions. And we haven`t even mentioned the polluting and excessive material that is often used to pack the products. In order to satisfy consumers ever-rising desire to buy products online and on-demand without burdening the environment, effective intervention taken by companies in e-commerce and e-commerce logistics is quickly needed. The sector has already made great strides in the field of sustainability, but there is still much to be gained. Many retailers and logistics companies claim to be sustainable and CO2-neutral, while they only focus on carbon offsetting and do not actually take action within their own business operations. This must change. In this article you can read how retailers can use a ship-from-store fulfilment strategy to really reduce their carbon footprint and contribute to a more sustainable sector as a whole.
Carbon offsetting vs carbon insetting Nowadays, companies tumble over each other to tell the world how sustainable they are. They understand that sustainability becomes the key message during the years to come and are therefore doing everything they can to achieve CO2-neutral status. However, many companies do this mainly through carbon offsetting. Carbon offsetting means that companies invest in environmental projects outside of their own value chain, in order to balance out the carbon emissions from their operations, and with no plans to reduce their own emissions. An example of this is investing in reforestation projects of a third party. This involves two problems:
A company selling a carbon credit might claim the underlying emissions reduction for itself, while at the same time the company buying the credit also claims the same emissions reduction. Example: Company A pays company B for the offset project and both entities count the emissions reduced in their respective books. Often the reductions achieved by a project are not additional to what would have happened had the project not been implemented. Example: Company A pays company C for reforestation initiatives that were slated to happen anyway.
With carbon offsetting, companies still emit (a lot of) carbon emissions with their own business activities, these are only compensated elsewhere. Offsetting does not reduce companies’ own emissions and will therefore not contribute to a cleaner world in the long term. In the current climate crisis, it is necessary for companies to reduce their footprint internally as well. Carbon offsetting is therefore a good start, but not far from enough. To really make a difference, companies have to focus on carbon insetting. This means that companies need to start decreasing their emissions inside their operations and supply chain. Examples include replacing fossil fuels with more sustainable alternatives, sustainable modes of transport and installing solar panels on company buildings. Companies that manage to achieve this are not just CO2-neutral, but net-zero.
Often the reductions achieved by a project are not additional to what would have happened had the project not been implemented. Example: Company A pays company C for reforestation initiatives that were slated to happen anyway.
Companies need to review their own supply chain and identify opportunities to eliminate their own carbon emissions. Retailers with an online sales channel and a brick-and-mortar store have the opportunity to decrease their emissions inside their operations and supply chain with a ship-from-store fulfilment strategy. Ship-from-store achieves this in three ways:
With ship-from-store, online orders are sent from the brick-and-mortar store to the consumer. The store is used as a mini-fulfilment centre, while also retaining its original function as a retail location. Because brick-and-mortar stores are located in close proximity to the consumer, more sustainable delivery vehicles can be used, such as the (cargo) bicycle. Moreover, products can travel the longest part of the supply chain in bulk and not packed in individual boxes, allowing more sustainable and slower ways of transport like boat and train instead of plane and van.
In addition to environmentally friendly modes of transport, ship-from-store provides a reduction in cargo load compared to traditional ecommerce logistics. This is because ship-from-store allows products to be shipped in bulk to the store before they are fulfilled in the local store for delivery to the final consumer. Ship-from-store transports cargo in a more efficient way, which reduces transport movements.
When shipped from a central fulfilment centre, which is the case with traditional ecommerce logistics, individual orders travel thousands, hundreds or at least tens of kilometres before they are delivered to the final consumer. With ship-from-store, on the other hand, the ecommerce supply chain can be reduced to only a few kilometres.
We from StoreShippers believe that carbon insetting with ship-from-store is the future of global sustainable online retail. Ship-from-store changes the supply chain as a whole in a way that carbon emissions per package are structurally reduced.
