Catching up with the e-commerce boom
Online shopping and the e-commerce sector in general have grown considerably, especially over the last few years. From 2014 to 2019, online sales have almost tripled globally1 due to multiple factors such as the emergence of new digital business models and technological advances in the delivery sector, allowing faster and more flexible delivery.
E-commerce already accounts for 13% of retail trade in goods and has increased by 37% in 2020 compared to 2019 due to the pandemic and Covid-19 crisis.2
Online shopping, as well as other commercial/consumption practices, have several impacts on the environment that must be considered, including transport, packaging, shipping, delivery, as well as social and societal impacts. As a result, to meet customers’ growing demand to buy products online, the number of delivery vehicles in the top 100 cities globally will increase 36% by 2030, resulting in 32% more emissions.3
A culture shift towards sustainable products and practices with low environmental impact
Consumers are increasingly aware of the ecological and environmental impact of retail growth, e-commerce, logistics, and other sectors in general. Hence, they are ready to support brands that participate and implement actions that contribute to environmental care and are even willing to pay more for an eco-friendly product.
Studies published by ADEME[4] and CONE[5] on corporate social responsibility (CSR) show how consumers respond when a company supports environmental social issues:
- 72% of consumers are committed to responsible consumption and 64% have more confidence in brands that offer them sustainable products4
- 87% of consumers will have a more positive image of a company that supports social or environmental causes5
- 88% will be more loyal to a company that supports social or environmental issues5
These figures clearly show that “going green” is no longer an option, but a necessity for organizations.
With the rise of e-commerce and its associated supply chain demands, logistics and Fulfillment, companies and sellers are aware of the need for sustainable developments, and that they have a strong role to play to reduce environmental impact in the supply chain.
This will undoubtedly start to point the way towards a more sustainable or “green” logistics. But what exactly does this term mean?
Green logistics, much more than just a trend
When we talk about ‘green’ or sustainable logistics, we refer to any business practices, processes, and efforts that minimize environmental impact and are focused on improving supply chain activities: sourcing raw materials, process transformation, storage, packaging, distribution, delivery, and end-of-life management.
Companies which can demonstrate significant and permanent steps towards a more responsible and sustainable future are more likely to be supported and get more loyalty from consumers.
What are some main areas related to sustainable logistics, and what practices and processes will lead to environmental efficiencies that will help reduce the carbon footprint and emissions level? Here are a few:
- Low carbon delivery: Today, last-mile delivery accounts for 25-30% of emissions in urban areas1. That’s why it’s important to gradually change combustion-powered vans to electric or hybrid vehicles or alternative vehicles, such as cargo bikes. Also, for both inbound and outbound transportation, it is essential to load vehicles as much as possible. There should be no more half-empty trucks.
- Greener packaging: According to a recent MIT study[6], packaging accounts for up to 2/3 of e-commerce emissions, including the production, their supply, use and their end of life. It is therefore critical to take measures to reduce the use of delivery packaging and move towards reusable or made from recycled material packaging.
- Sustainable warehouses: To reduce the problem of land artificialisation, logistics providers can decide not to build a new warehouse and to buy existing buildings instead. They can also share their warehouses with other companies. To reduce the energy footprint, logistics providers can turn their warehouses into energy-positive buildings with solar panels on the roofs, thermal insulation, and the use of LED lighting.
Moving forward and committing to support and reduce environmental impact
Last July 2021, several online retailers and the Federation of e-commerce and distance selling (FEVAD)[7] signed an agreement committing themselves to reduce their impact on the environment.
This contract is aimed at publishing a set of voluntary commitments to many of our partners, collaborators, and customers, such as: Fnac-Darty, Rakuten, Cdiscount, among others. Some key topics and specific measures include:
- Informing consumers of the environmental impact of delivery by offering them several methods of product delivery, as of January 1st, 2023, (delivery point, time, vehicles, etc.)
- Encourage good ordering habits by informing consumers about the environmental cost of returns and encouraging them to take only one size and not several.
- Reduce the volume of delivery packaging for at least 75% of products or packages by December 31st, 2024, by eliminating over-packaging where the supplier’s packaging allows, reducing empty space using bespoke packaging or packaging adapted to the size of the product, or via packaging reuse solutions.
- Use only delivery packaging made from recycled, recyclable, or reusable materials, and favour packaging materials with the best environmental track record.
- Encourage the development of low-carbon delivery methods: By making it public, as of 2023, the share of low-emission vehicles among vehicles under 3.5 tons used for delivery in carrier fleets, including cycle vehicles.
Octopia Fulfillment: our first steps and progress towards sustainable, green logistics
At Octopia we firmly believe that fulfillment is part of the solution, rather than part of the problem, and that fulfillment providers like us should be in the vanguard of reducing the environmental impact of eCommerce. Below are some initiatives we and our partners are working on to minimize our impact on the environment, while constantly providing a best-in-class experience for our sellers and their customers.
1. Energy-efficient warehouses
- The warehouses within our network in Spain use solar panels, allowing them to generate 20% of their electricity consumption through renewable and reduce their carbon emissions.
- Warehouses within our network have set up a general framework to monitor and reduce their environmental impact: Integrated environmental management system, environmental KPI monitoring, energy-efficiency policies (including LED installation, heat management and insulation work), waste management policies, including sorting and recycling instructions, and employees training and awareness.
2. Packing & packaging
- Ecological packaging methods: a combination of processes is used to reduce the packaging emptiness. For instance, 3D packaging machines allow the box to adjust exactly to the dimensions of the products to be packaged. This enables a 30%-volume reduction on average. Fewer trucks are thus required to deliver the parcels, contributing to reducing the carbon footprint of logistics. 2D machines or a variety of kraft envelopes complete the methods used in our French warehouses.
- 90% recycled packaging[8] made from eco-labeled cardboard (manufactured in France by Smurfit Kappa and Saica from recycled wood products from sustainably managed forests), recycled kraft paper, and 100% vegetable-based ink for packaging.
3. Delivery
- Bulk cargo: we are working with some of our transport partners to load trucks in bulk and allow us to prevent using pallets. When applying this method, we increase the truck filing rate by 25%. This loading method, combined with our efforts to reduce the emptiness in parcels, helped our French logistics partners achieve a 30% reduction of the number of trucks used for delivery.
- Developing alternative transportation: thanks to the strong partnership built with carriers, Octopia contribute to the acceleration of sustainable fleets in France.
4. Carbon sequestration
- Sponsorship of Plantons pour l’avenir[9], an endowment fund that supports reforestation projects in France, environmental education, and research projects. Each year, the emissions generated by our French logistics partner are sequestrated through this long-term partnership (310 hectares reforested since 2020 in order to sequestrate 54.825t of CO₂ emissions).
- Investment in forest conservation near the warehouses in Spain: care and maintenance of 600 trees, equivalent to 97 tons of CO₂ emissions absorbed each year.
Greener fulfillment
“At Octopia Fulfillment our fundamental belief is that mastering green logistics is crucial, not only to minimize our impact on the planet but also to sustain the long-term health of our business.
We are proud of our industry-leading position on environmental performance thanks to our initiatives and those of our partners. But we also recognise that we still have a long way to go – and commit to continuously improving our environmental performance as we and our clients grow” says Benjamin Hamilton, Director at Octopia Fulfillment.
About Octopia Fulfillment
Octopia Fulfillment works with hundreds of sellers from all over the world to handle their fulfillment and help them grow. Our teams have over 10 years’ experience in marketplace fulfillment and ecommerce logistics. Click here to discuss your business needs with one of our specialists.
Contributions:
Clement Pestel – Logistics Project Manager
Amelie Latreille – Project Manager
Caroline Bordet Le Lann – CSR Director
Paola Monteverde – Growth Marketing Manager
References
1 The Future of the Last-Mile Ecosystem, World Economic Forum, 2020
2 A sustainable development e-commerce, France Strategy, 2022
3 Emerging challenges for the ecosystem, World Economic Forum, 2020
4 ADEME,2021
5 CONE, 2017
6 Environmental Analysis of US Online Shopping, MIT, 2020
7 FEVAD
8 Eco packaging, 2019
9 Plantons pour lavenir
