What does it take for logistics to be truly sustainable?
New working models, new technology and new fuels are all key steps towards the sustainable logistics of the future. But by far the most crucial aspect is something that needs to happen in the pit of our stomachs and in the minds of us humans.
This article was actually meant to be about alternative fuels. But speaking to our advisor Magnus Swahn, an expert in sustainable logistics and an important part of our network, convinced us to take a look at a much broader perspective.
To cut a long story short: the most important step towards sustainable logistics is realising and accepting that there will never be a silver bullet. This is hardly a revolutionary insight in itself.
Unbalanced attention
The problem is that it’s the simple solutions that generate the headlines – headlines that can create a false impression that a saviour is here to rescue us from the climate crisis. In actual fact, it’s all the little, slow things that will together make a real difference.
It’s precisely these “little things” that we want to encourage and inspire with this article. Even if it means we need to point out shortcomings in solutions we believe in and advocate. Because the solution is not one single thing; rather it is everything combined.
Magnus Swahn, Conlogic AB
Solutions with their own problems
Anyway, let’s begin with alternative fuels. Biogas, ethanol and so-called biodiesels, such as HVO (hydrogenated vegetable oil) and RME (rapeseed oil methyl ester), are the most common alternative fuels currently in use.
With their renewable sources and decimated emissions, there is a lot that sets these fuels apart from their fossil predecessors. One problem, however, is that they are niche fuels, and there is no opportunity to produce anywhere nearly as much as is needed.
One example: in absolute terms Germany and France use more HVO than Sweden. But if they began using as much as Sweden in percentage terms, the amount they consume would increase by so much that there would no longer be enough HVO for Sweden. None at all.
When it comes to electricity as an alternative fuel, we are pleased to see the progress being made. But there are still many issues to straighten out. The main points concern how we’ll manage to produce all of the electricity and how we’ll get it to where it’s needed, as well as how we’ll deal with the noble metals needed in modern battery and engine technology. Once again, this is a solution that attracts a lot of attention but is far from being able to stand on its own two feet.
We could carry on highlighting the difficulties and obstacles, but we’ll stop here because we don’t want to get hung up on the problems. Instead we’d like to address everything that can be done to make a real difference.
Here we start with a model we’ve borrowed from the sustainability expert Magnus Swahn. He has developed this model to visualise the different levels that have an impact and interact in a logistics system.
Traffic infrastructure
At the most basic level, our individual opportunities to make an impact are quite small. Take rail transport as an example. The little we can do is increase demand for it, but what is needed above all are political decisions and huge investments to expand the railway network.
Although we cannot do that much here ourselves, we still want to include it here, mainly as a reminder of the importance of building for the society we want tomorrow instead of prioritising solutions to problems we had yesterday.
Supporting subsystems
By “supporting subsystems” we mean vehicles and fuels, i.e. what we have partly addressed. Despite the challenges we mentioned earlier, there is a lot to be gained here. Every vehicle powered by a renewable energy source is a step in the right direction, even if it cannot be the whole solution.
A recent example of progress in the right direction is our customer Elgiganten, which is currently switching to 100% HVO for all of its transport to Finland. We also have a number of biogas-powered long-distance vehicles for Elgiganten’s transport to our largest hubs in Stockholm, Gothenburg, Oslo and Copenhagen.
We have hybrid vehicles (with electricity and HVO) at our customer Løvenskiold in Norway and a high proportion of RME and HVO in our beverage distribution. In the near future, we will also be commissioning several biogas-powered distribution vehicles.
Traffic
One level up, it’s a case of how vehicles and goods move. This is where a lot of hard work goes on that may lead to improvement of only around one percent a year. This is one percent that hardly makes any headlines but is absolutely indispensable in the long run.
We put a lot of effort into optimising everything from driving routes to internal flows in warehouse terminals and distribution hubs.
We also expend most of our social sustainability efforts on traffic. What we are doing here at InQuire is eliminating as many links as possible between ourselves and the drivers. In practice this means that we work with hundreds of small hauliers instead of a few freight forwarders.
One of the benefits of being closer to the people behind the wheel is that it makes it far easier for us to check for compliance with the strict requirements we set. When we sat down with Elgiganten to jointly develop their sustainability concept Logistics with Heart, we were among the first to write into our contracts with carriers that operate in Europe that the drivers must be able to return home to their families at least every other week. At the time we made the industry furious, but today it’s often a hygiene factor.
We stipulate requirements for wages, language skills and the vehicles themselves since they are the drivers’ workplace.
Transport
At the top level of the model we find systems for the supply of goods. There can be hidden culprits here who throw a spanner into the works of other improvement opportunities. For example, there may be rigid demands on lead times, which in turn completely rule out things such as an optimised load factor.
In external transport, fast deliveries are a common competitive tool. But the question is whether everything always needs to be delivered that fast? And why not give consumers more and clearer choice to enable smarter deliveries and more well-stocked transport? Perhaps that package containing newly purchased gadgets doesn’t have to be at the front door the next day.
It’s a constant challenge for us to increase the load factor without compromising the competitiveness of the deliveries themselves.
When it comes to the internal supply of goods, we’re working on planning and on data-driven, proactive efforts to try to eliminate the unnecessary use of resources. Once again, it’s slow work, but with that meagre one percent improvement that means so much.
Supply of goods
I modellens översta lager hittar vi system för varuförsörjning. Här kan det finnas dolda bovar som sätter käppar i hjulen för andra förbättringsmöjligheter. Till exempel kan det finnas rigida krav på ledtider som i sin tur omöjliggör saker som optimerad fyllnadsgrad någon helt annanstans.
Vid externa transporter är snabba leveranser ett vanligt konkurrensmedel. Men frågan är om allting alltid behöver gå lika snabbt? Och varför inte ge konsumenten fler och tydligare val för att möjliggöra smartare leveranser och mer välfyllda transporter? Kanske måste inte det där paketet med nyköpta prylar hänga på ytterdörren nästa dag.
För oss är det en ständig utmaning att öka fyllnadsgraden utan att tumma på konkurrenskraften i själva leveranserna.
När det gäller den interna varuförsörjningen jobbar vi med planering och datadrivna, proaktiva insatser för att försöka få bort onödigt användande av resurser. Återigen ett långsamt arbete, men med den där ynka procentens förbättring som betyder så mycket.
In conclusion
When the long-awaited saviour turns out to be just a small, small part of the solution, it’s easy to feel gloomy. After all, the headlines promised so much. But this is also why we want to strike a blow now for all those small, slow, laborious efforts – the ones that never generate their own headlines but together become something big.
Alongside what we’ve mentioned in this article, we are continuing to test new technology and fuels with our customers and suppliers so as to help influence developments in both the little things and the big things.
And we hope that anyone who has read this far has found one or two thoughts or lessons that could give rise to new ideas. Thank you for taking the time to read this!
Footnote: We have used a simplified variant of Magnus Swahn’s logistics model from which we have removed travel and community planning because they fall outside the scope of what we do or can influence.