Recently I have been discussing with David Steven of Boston Strategy International, a world expert on sustainable supply chains, on the topic of carbon foot printing. One of the interesting points we talked about is the impact of the growth of the E-commerce sector on global carbon emissions.
Researchers have been studying this for a long time. One very interesting study on grocery shopping in the UK is by P. van Loon et al (2015). They first summarize 7 types of retailing models:
In particular, PP2 and PP3 are UPS/Fede-type of delivery models (note the very small numbers of items in an order in those two models).
The resulting CO2 emissions are very interesting to look at:
Notice that PP2/3 have a much larger carbon footprint. The authors explain that this is large due to failed deliveries and consumer returns. In PP1 stores pre-arrange delivery windows, so there are very few failed deliveries.
There are many other good insights, such as:
- Basket size is a crucial factor. As demonstrated by the authors, when basket size is over 25, then some (not all) types of e-commerce operations can dramatically decrease their CO2 emissions to the level of old-fashioned on-foot shopping.
- When we look at small-basket delivery, packaging becomes a signifiant factor. Unfortunately, it looks like the growth of e-commerce means there will be more and more small packages.
- Do not forget return and non-delivery. With e-commerce, returns will continue to rise. Additional carbon will be generated with those trips.
- DCs seem to generate very little CO2. However, this may change if there are very large number of DCs (and not enough consumer trips are being replaced).
The big takeaway? Logistics (transport and delivery) are generating a lot of carbon emissions. We need to do much more work to reduce those emissions.