Sustainability in Shipping
We’ve all been talking about how shopping patterns and, therefore, shipping patterns have changed since 2020, but what we should really be talking about is the effect that those changes could have on the environment. According to a report from Freightwaves, the total count of final-mile delivery vehicles on the road could increase by 36 percent and greenhouse gas emissions by 30 percent overall by 2030 — all due to the e-commerce boom.
When we surveyed consumers early last year, we learned that they're thinking about the environmental impacts of their purchases. In fact, a full 88 percent of consumers reported that sustainability is an important factor in their purchasing decisions. Two-thirds reported that sustainability had become more important to them as a result of the pandemic. When we checked back in with consumers early in 2022, 82 percent still reported that sustainability was important to their purchasing decisions.
Amplifying the conversation around sustainability in shipping will create a greener path forward for e-commerce fulfillment. The conversation matters for the future of our planet, and it matters to consumers.
If we all agree on the “why” of sustainable shipping, the big question then becomes how — especially for small to midsized businesses with limited resources. At Ware2Go, we’ve found the answer is two-fold: lowering time in transit (TNT) and offsetting emissions through the purchase of carbon credits.
Lowering Time in Transit (TNT)
TNT refers to the time a package spends in transit to its destination on a delivery vehicle. Ultimately, the more time a product spends on a delivery vehicle, the more carbon it emits.
Merchants can achieve lower transit times by distributing their inventory closer to their end customers. This is a strategy long employed by major retailers with enough owned resources to leverage a hub-and-spoke distribution network. However, businesses of all sizes can achieve a distributed warehouse model through a partnership with an on-demand warehousing provider.
On-demand warehousing is a fulfillment model that aggregates multiple merchants’ inventory and daily shipping volume to help merchants negotiate for space and labor with top-tier 3PLs. Because merchants’ volume is aggregated, they can more easily spread out their inventory to multiple fulfillment centers and significantly decrease TNT and, therefore, reduce their carbon footprint.
Offsetting Emissions With Carbon Credits
By purchasing carbon credits through a verified marketplace, merchants can offset their emissions by funding forest projects that draw a comparable amount of CO2 back into the atmosphere and neutralize their carbon output.
Each carbon credit is equivalent to one metric tonne of CO2 equivalent removed, reduced or avoided from being emitted into the atmosphere. Carbon credits represent climate benefits that wouldn't have been achieved without financial backing.
Marketplaces like Pachama use artificial intelligence and remote sensing to monitor forest projects all over the world. By closely monitoring both reforestation and forest preservation projects, they're able to measure their efficacy at reducing or drawing down carbon.
Sustainable Shipping That Meets Customer Expectations
Consumers still care about fast shipping. In fact, 33 percent of consumers have higher expectations for shipping speeds as a result of the pandemic. And it's possible for merchants to meet expectations for fast e-commerce shipping without compromising on sustainability.
Distributing inventory closer to the end customer decreases TNT to not only reduce carbon emissions but also enable faster delivery. A distributed warehouse network can be optimized for one- to two-day ground shipping, nationwide — meaning merchants of all sizes can make the ethical choice and still meet their customers’ expectations.
Nick Hyder is the manager of data science and analytics at Ware2Go, a A UPS company that provides on-demand fulfillment and warehousing so merchants can get closer to their customers and provide one- to two-day shipping.
Nick Hyder is the manager of data science and analytics at Ware2Go, where he mines fulfillment data to uncover insights that help companies of all sizes complete and grow. As part of the Business Operations team, he’s developed cutting edge demand forecasts, piloted network and inventory optimization tools, and created guardrails for measuring the carbon output of Ware2Go’s network.