Apr 28, 2021 | Foreign Exchange

Surge in online shopping and post Brexit stockpiling causes the logistics industry to rethink sustainability options.

As logistics and distribution witness skyrocketing demand, sustainability has come to the forefront for businesses operating in those industries. How can decision-makers deliver to these fulfilment and distribution needs whilst maintaining their environmental credentials?

Logistics

According to research firm IBISWorld, in the UK, the warehousing and storage industry was expected to boom over much of the five years through 2020-21, with industry revenue projected to grow at a compound annual rate of 3.6% to £21.4 billion.

Many believe that this growth has been fuelled by the upsurge in online shopping, particularly for fast moving consumer goods. Additionally, the uncertainty around Brexit and the COVID pandemic have caused some sectors, particularly Manufacturing and Pharmaceuticals, to stockpile goods, driving further demand for storage and distribution.

In North America, demand in Q1 2020 surged by 51% as pandemic-driven online sales shot up according to the Wall Street Journal and the Colliers Report.

Therefore, increased needs for distribution space, as well as shortened processing, packaging and turnaround times mean that businesses must prepare for the continued growth that lies ahead. But how can they do so sustainably?

2021 sustainability trends to support the logistics industry

Automation: As the pandemic continues, adjustments are required to maintain a sustainable and safe work environment as well as support employees’ health. One way to achieve that is through technology and automation. Many businesses have started to turn towards automation with equipment such as automated forklifts, electric vehicles which can enable employees to move trailers as well as load docks & spaces, and even rack entry vehicles that can quickly and efficiently transport pallets and containers in and out of storage units. Not only do these devices help support increasing needs in the logistics industry, but they do so in a sustainable way through fewer emissions, reduced maintenance, lower operating costs and reliable, clean power.

Optimal facility functions: Even the smallest of initiatives such as converting to LED lighting, maintaining a well-insulated building, or setting timers/sensors to reduce electricity, water or gas usage can increase a business’s sustainability and in the long run, potentially save money. According to the Leadership in Energy and Environmental Design (LEED), “LEED-certified buildings use 25% less energy, have 34% lower CO2 emissions and consume 11% less water.” LEED has also diverted over 80 million tons of waste from landfills.

Reduce, reuse and recycle: According to a global survey produced by management consultancy firm Accenture, 60% of consumers have been making more environmentally friendly, sustainable, or ethical purchases since the start of the pandemic. 9 out of 10 of that percentage said they were likely to continue doing so. As online shopping persists, it is important that businesses within the logistics sector look at providing environmentally sustainable packaging. By doing this, not only can they increase their consumer appeal, but warehouses can also drastically lower waste by reusing pallets and containers and recycling materials such as cardboard and metals. In recent months, many supermarket giants have come forward announcing they will look to reduce plastic packaging substantially in the coming years.

Renewable energy: With an increased demand to reduce businesses’ carbon footprint, it is no surprise that the logistics industry is at the forefront when it comes to equipping warehouses and distribution centres with solar panels. According to Prologis, about “15% of a warehouse’s total operating budget goes toward energy costs.” Therefore, making solar-powered warehouses and distribution centres a sought-after commodity as not only does it save them money, but it also gets companies closer to their environmental, social and governance (ESG) goals.

How can Western Union Business Solutions help?

As the logistics industry evolves into this new era, making investments and devising strategies to support its growth, we can help you maintain a sustainable business for the future by managing your currency risk and international transactions. For further support contact a specialist for a non-obligatory meeting to discuss your options.


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