Evaluation of Benefits of Sustainability Policies

b’Subject: Economics’
b’Topic: In-Depth Evaluation of Benefits of Sustainability Policies, Initiatives and Solutions for a Retailer or a Logistics Busines’
b’Only one part of work. Rewrite completlnyzy, was copied from internet’

 

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Logistic is a key driver of economic growth, wealth creation and jobs. In terms of their direct contribution to the economy, logistics account for around 9% of global GDP (Logistics Today, 2010). In the European Union alone, the logistics sector generated revenues of €1 trillion in 2009, which is equal to 10% of European GDP (Klaus and Kille, 2008/2009). Despite the current situation with COVID-19, we should not lose sight of climate change. In the long term, it is a much bigger problem with existential consequences. The logistics industry is part of the problem, but the sector will definitely also be part of the solution.

Having contributed significantly to economic growth, increased employment and the creation of a global marketplace, the logistics sector must now equally understand its responsibility for the environmental impact.

As already demonstrated by many companies today, sustainability can be a trend-setting business model, opening up new market opportunities and preparing for future scenarios. However, one of them in particular seems to be more concentrated on being an environmentally friendly business – DPD Group.

Green feet

Environmental sustainability is a hot topic in the business world, and logistics companies are feeling the pressure more than most to raise their green credentials, many are placing a sharp focus on the vehicles. Electric vehicles probably have a major impact on the logistic industry. Recharging the battery from grid could reduce fuel consumption by about 50% in comparison to hybrid vehicles. As a positive side effect, this will also reduce the noise level of stop-and-go traffic in inner-cities. These vehicles can travel up to 120 miles per day on a full charge, saving 8 tonnes of GHG emissions per year. An average battery electric car and plug-in hybrid electric car using electricity characterised by the current global average carbon intensity (518 grammes of carbon-dioxide equivalent per kilowatt-hour [g CO2-eq/kWh]) emit less GHGs than a global average ICE vehicle using gasoline over their life cycle (pag. 5 IEA. Global EV outlook 2009).

As of 2017, transport was the largest-emitting sector of the UK economy at 126 MtCO2e, accounting for 28% of UK greenhouse gas (GHG) emissions. The Government’s 2018 Road to Zero Strategy outlines how it will support the transition to zero emission road transport and reduce emissions from conventional vehicles. It sets out several new measures, including an “ambition” for at least 50% — and as many as 70% — of new car sales to be ultra-low emission by 2030, alongside up to 40% of new vans. To achieve set out ambitions, the Government is investing nearly £1.5 billion between April 2015 and March 2021, with grants available for plug-in vehicles and schemes to support charge point infrastructure. Government plans to invest over £600 million over the next 5 years to achieve the aim for almost every car and van to be a zero emission vehicle by 2050 according to CCC analysis. According to this initiative there are 5 categories of car eligible for a grant (figure 3).

Category CO2 emissions Zero emission range Grant Maximum amount
Car(up to £50,00) Less that 50 g/km 112 km (70 miles) 35% Up to £3,000
Vans Less then 75g/km 16 km (10 miles) 20% Up to £8,000

 

Figures published by the Society of Motor Manufacturers and Traders (SMMT) each month show that electric car sales in the UK have risen dramatically over the past few years. While only around 500 electric cars were registered per month during the first half of 2014, this has increased to an average of almost 12,100 per month for 2020

Source: Society of Motor Manufacturers and Traders, October 2020.

Figure 4.

DPD Group is engaged with local authorities to anticipate and react quickly to new requirements and legislation and the electric vehicle is part of DPD’s ambition to become “the most responsible city centre delivery company and the leader in electric vehicles in the UK”. The firm aims to have a fleet of 500 electric vehicles by the end of 2020, which would equal 10% of its total fleet. In the UK of more than 700 electric vehicles, along with 3,600 charging points, and 80 new urban depots. That will mean that 17% of the parcels that DPD delivers will be delivered using zero or low emission vehicles by the end of 2025. However, it was already14% decrease in CO2 emissions per parcel in 2018 vs. 2013.

In UK DHL delivers parcels by from cargo bikes to 7.5t. vehicles. The largest number (575) is Nissan eNV-200, capable of making 120 final mile parcel deliveries per day on just one charge and, obviously, with zero emissions. And EAV, the world’s best electric-assisted cargo bike, created  by a British start-up company. DPD UK have proudly acquired a Green Apple Award for Environmental best practice in 2020.

As we can see from the above data, the company can really be called the “greenest” in UK. Investments in green transport have not only significantly reduced CO2 emissions, but also created a positive image of the company, which has become its contribution to the future.

 

Customers’ behaviour and expectation

 

Every businesses couldn’t exist without customers, and the most important factor to grow up, to exist for business is to listen to and predict them. The aim of company is not only to reduce costs, but also CO2 emissions, without negatively impacting customer service levels. Not only independent organisations, but I company on their own conduct the survey to find out about customers’ preferences and expectation. In accordance with survey “e-shopper barometer” conduct by the DPD group in July 2020 sustainability has become a key buying criterion: 70% of regular European e-shoppers believe brands have to be environmentally responsible.

DPD, among other multinational delivery company, offers a solutions to make a customer a part of delivery system. For example, the most common problem is when the delivery person can’t find the customer at home. Each year around  at the first 40 million deliveries fail to reach their destination attempt. In this case, the package must be returned to the warehouse, which presents not only increased level of CO2 emission, but also a risk of damage and an additional cost. One way of addressing this is increased use of pick up and drop off (PUDO) points. DPD Group are creating a network of all-electric micro-depots so that all-electric vehicles are located closer to customers. Shoppers will also get their next-day delivery in a cleaner, quieter and more sustainable way.  Similar practice we can find in DHL and UPS. In accordance with DPD survey: ability to return by dropping off in a parcel shop – 99% would like to see in offered service.

Another important solutions is Predict one-hour delivery notifications to let customer know when to expect the courier. Every year DPD sent a quarter of billion notifications and now over 6 million of customers use the app to micro-manage their delivery preferences and tell us exactly how they want their parcel to be delivered. The end result is that now DPD delivering 99.8% of all parcels the first time. That’s a massive 4.5 million extra return journeys avoided or 3.5 million fewer miles travelled and 1233 tonnes of CO2 not being needlessly generated.

 

 WAREHOUSES

Warehousing – an integral part of any logistics network – comprises a wide range of functional, including storage, picking, packing. Overall, It is estimated that building make up around 13 % of the freight sector’s carbon emissions. Optimizing a network design, including the nodes and interrelated transport flows, can reduce both costs and carbon emissions significantly.

The key challenge to deliver emission free in cities, and the best solution is to make fewer, shorter journeys, investing in clean, green, emission-free vehicles and creating a network of all-electric micro-depots so that all-electric vehicles are located closer to customers. In 2018 DPD opened the UK’s first all-electric micro parcel depot in Westminster, and now company is developing a network of these micro-depots across central London. Parcels are fed into the micro depots by electric 7.5t trucks, and the final mile deliveries are then made by the fleet of innovative all-electric vehicles including unique e-cargo bike. The Westminster depot was a real game-changer. It is smart and it delivers tangible benefits in terms of reduced mileage and CO2. It is also great to be able to say that DPD delivers to Her Majesty the Queen and the Prime Minister with electric vehicles. Company also have two other all-electric sites in central London, and aiming to have seven in total. Then roll-out the model across the rest of the country.

This choice of the company can be confidently called a successful solution for reducing CO2 emissions, as well as improving the image and reducing the additional cost. Interesting solution is also deposit close to an airport, port, road congestion. For example, in 2008, a total of 218000 km were saved through the consolidated deliveries close to Heathrow airport of the DHL fleet, which amounted to 158000 kb in fewer CO2 emissions and a significant reduction in congestion.

 

 

 

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