(The Author is Mr. Cyrus Katgara, Partner, Jeena &Co.)
As soon as we talk about green logistics, the conversation gets confined to transportation. Though it is a major sub-sector, the category is vast and includes facilities like warehouses, airport terminals, and packaging, distribution, material handling & even disposal. It is one of the major contributors to environmental pollution and around a quarter of carbon emissions are due to this major sub-sector i.e; transport. But blaming it all on GHG emissions may not be the right thing to do. Warehouses pose a major threat and so do the terminals with all their contribution to noise pollution. Add to that discarded products, packages, and improper waste disposal and you are sitting on a landmine of environmental hazards. Having said that, it is not uncharted territory. Day-in and day out every logistics solution provider is trying very hard to navigate this conundrum. Especially in a country like ours, it is much more difficult where the sector remains largely unorganized with individual truck operators, who have absolutely no adherence to performance matrices of “going green”.
Amidst traditional and new challenges (primarily brought about by the e-commerce industry and consumer apathy resulting in packaging waste), the industry is geared towards technology adoption like Artificial Intelligence (AI), creating robust supply chains, modernizing warehousing facilities, adopting a green fleet, optimizing routes for faster reach and adopting alternative fuels. B2B customers have already become discerning and with more awareness across all levels, the future looks bright for the Indian logistics sector in playing a pivotal role in helping the environment.
Way forward for a greener approach:
- Smart warehouses
Environment-friendly warehouses use efficient energy management systems (EMSs) for the conservation of energy. With the combination of timers, thermostats, and gauges for all forms of fuels and power consumption, modern EMSs plan best practices of consumption, control wastage, and manage fuel costs.
Automating warehouse solutions and management processes also increase energy efficiency. In addition to implementing these, we are incorporating pick-to-light technology, bar-coding, RFID, and ASRS (automated storage and retrieval systems) to achieve the goals of a sustainable warehouse.
Additionally, warehouse design plays an important role. These include encouraging day-lighting technology (skylights, photocell sensors, solar panels, LEDs), recovering heat from cold storage, and recovering heat from the cold storage systems). Since energy efficiency is the key, companies are looking at maximizing their cube-wise space and fully optimizing the warehouse for efficient material handling, order picking, and storage processes, accommodating personnel movement, and handling of equipment. Inefficient use of warehouse space leads to excess utility, unwarranted labour costs, and lower asset utilization.
- Alternative fuels
The government is pushing the adoption of LNG and EVs fast in the sector. It is said that sustainable fuels such as biodiesel, electric fuel, ethanol, hydrogen, methanol, natural gas
(CNG/LNG), propane (LPG), DME, P-series, and solar fuels will play a critical role in the next two decades. Climate-friendly or client-neutral logistics is an imminent future and joint efforts are being made to achieve just that. Until the transport industry fully adopts EVs there will be a crying need for alternative fuels, especially in the air transport sector.
A clean and reliable alternative could also be Hydrogen Fuel which is actually the next best option for climate-neutral fuels after EVs. Hydrogen fuel is globally acknowledged as a cost-efficient and effective choice that can be a solution to the environmental problems that we are facing. The benefits and emergence of Hydrogen Fuel offer — high octane ratings, energy content, and most importantly, a large base source for production. Many countries are adopting it fast including India.
- Reverse logistics
All elements of reverse logistics can have green implications. Globally the phenomenon is catching up and hopefully soon in India too. Reverse logistics by definition is a process by which companies can recycle, refurbish and reuse, thereby guaranteeing a certain level of green in their supply chain management.
Effective implementation of reverse logistics empowers to cut out inefficient return processes that result in unnecessary transportation. It can reduce a company’s environmental, social and economic impact. The goal of reverse logistics is to maximize value from assets, it keeps recycling its focal point which results in producing lesser waste.
Reverse logistics efficiency can be gauged during the holiday season, where in the first two months there are maximum returns of goods. If a company is not empowered with a reverse-logistics strategy then it risks losing revenue as well as customers.
Digital tools and platforms help in conserving resources. One of the key features of digitization is transparency. Transporters can have an access to emissions, resources, and costs, thereby giving them the opportunity to achieve carbon neutrality.
Today internet penetration even in tier 2 and tier 3 towns of India is actually a boon to efficiency building and rapid technology adoption & automation by the logistics sector. Tracking of trucks, air, rail, and ocean freight via satellite has been happening for years now. AI and such technologies can now utilize that data to its fullest capacity. Intelligent transportation, route planning, and demand planning are a result that can help in increasing operational efficiencies. Fast adoption of digitization and adoption in warehouses help in scaling inventory management.
The year 2020 has been disruptive in many ways, across all sectors. Businesses have been pushed to look inside-out and the good news is we are becoming a more sensitive and aware industry. Being a core and essential sector for nation-building, the logistics industry has an advantage over other sectors. Though the process may be slow we have all the necessary framework to walk-the-talk and lead by example in adopting environment-friendly policies and help in making the world a better place to live in while making the economy of the country more robust.