Cutting Emissions starts with Smart Freight Management

13 September 2019 - By Sophie Punte, Executive Director, Smart Freight Centre.

This piece was written for Shell Rimula, in the lead up to my engagement as speaker at their 2019 media event “Shell Rimula Ultimate Stopover: collaborative thinking to power fleets of tomorrow” in Barcelona.

I’m a keen gardener. The other week, I had to replace my garden rake. So, I went online to see if I could get the new rake from a well-known Dutch hardware retailer. I could, and the retailer could deliver it the next day. But there was a €4,95 delivery fee.

Then right next to it I saw a message asking me if I would rather check to see if one of the retailer’s nearby stores had it in stock. One did. I reserved it and collected it the next time I was nearby.

With this simple change to its online ordering, the retailer did four things.

1. It made my life as a customer easier and cheaper
2. It lowered the delivery costs for the retailer
3. It helped fleet companies maximise fleet management by optimising delivery routes / schedules
4. Reduced congestion on the roads and ultimately, overall greenhouse gas emissions.

Smart Freight Management can help you cut emissions now

Say “freight demand management”, and you instantly think of the fleet; of schedules, freight brokerage and vehicles on the road. These are all important. But actually, effective freight demand management cannot be left to the fleet manager alone. It must start with the retailer — before the product is even dispatched.

What many retailers often don’t appreciate, is that by making small changes in areas we might not expect to be linked to freight demand management — for instance in online user experience (as above) or customer service, they can have a significant impact on the amount of commercial traffic on the road.

To take another customer-experience example, as many as 4 out of 10 customers return items they purchase online. When studying the impact of return policies, researchers at the University of Texas found that allowing the customer to return goods up to 30 days after purchase, greatly reduced the number of products returned[1]. Quite simply, people got attached to the things they had bought.

Any tweak like this that a retailer can make, which reduces return rates, also reduces the retailer’s transport-related emissions. And it’s good for business in more ways than just cutting costs. A poll in April 2019 found that 77% of voters said that a party’s global warming policy would be a key factor in how they decided to vote in EU elections[2].

And sure enough, when given the chance to translate their concerns for the environment into votes, Europeans sent a record-breaking number of Green candidates to the European Parliament. Why then, I often wonder, don’t more companies offer consumers a way to express their concern for the environment?

Imagine, for instance, that as well as offering me a range of delivery choices for my rake, the garden retailer had ranked those options according to the emissions involved?

The consumer’s experience would be far more positive if they were given a greener option instead of being steered away from options that cost the retailer more by confronting them with higher delivery fees. But they both reduce emissions and costs! And the more people that choose that green option, the bigger the win for the environment and the retailer.
And it will help reduce demands for emissions in the future. Here is a video that explains this really well!

Of course, it’s not all down to retailers. The fleet operators still have the biggest role to play in managing the demand to reduce emissions. The key here, is that we’re not trying to reduce demand for purchases or even for shipping. We’re trying to reduce demand for emissions.

Consumers will still buy the items. The items will still be shipped. But they’ll be shipped in fully loaded and utilised trucks, that travel fewer empty miles. And hopefully, as technology improves, those trucks will run on greener fuels — and so on.

Looking beyond the optimisation of how we use customer-experience to nudge or incentivise the consumer to be greener, the most important thing the road freight sector can do is to become data-driven. By using modern fleet-management software, fleets can collect data on everything from the impact of vehicle sub-systems to the most fuel-efficient routes.

Using this data, and working with the right suppliers and outside consultants, fleet managers can optimise everything from their drivers’ behaviour and the vehicles they use, through to fuel types, route choices and maintenance regimes, in ways that help both to reduce emissions and cut costs.

And data really is the nub of the matter. In both the examples from retail practice and practices on the road, the more we know about all the systems involved and the way they interact with each other, and humans interact with them, the better we can optimise for outcomes that yield both commercial and environmental benefits.

But to do that, we need common standards against which to calculate emissions and capture other data related to transport sustainability. And it’s exactly this, common standards, that the Smart Freight Centre, of which I am the Executive Director, is working towards. For more information on the GLEC Framework, the global methodology for the calculation and reporting of logistics emissions, click here.

Are you ready to act on reporting and reducing logistics emissions?
Join the GLEC Partnership.

[1] Narayan Janakiraman, Holly A. Syrdal, Ryan Freling. The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review. Journal of Retailing, 2015; DOI: 10.1016/j.jretai.2015.11.002

[2] Simon, F. (2019). Climate change will be key issue in EU elections, poll shows. [online] Available at: climate-will-be-key-issue-in-eu-elections-poll-shows/ [Accessed 29 May 2019].