FOCUS Sustainability
INVESTING IN SUSTAINABLE LOGISTICS INVESTING IN SUSTAINABLE LOGISTICS
T
he logistics industry is under growing pressure as it faces a complex web of external operational challenges and internal sustainability goals. Companies must now adapt to stricter regulations while also striving for more sustainable operations and meet the demand for faster deliveries. This evolving environment is driving a transformation in distribution networks to meet both regulatory and sustainability expectations. According to a 2024 McKinsey analysis, demand for green logistics could deliver an estimated $350 billion in 2030, comprising around 15 percent of total global logistics spend. This estimate does not account for potential price premiums on green shipping, signalling a fast track toward sustainable logistics solutions.
Navigating the new normal To navigate the bumps in the road, let’s explore the challenges reshaping the logistics industry.
Stricter Regulations: Governments worldwide are tightening environmental regulations, including low-emission zones (LEZs) and carbon restrictions. These regulations require businesses to shift gears and adopt greener practices, which operations. Electric vehicles (EVs) present an attractive eco-friendly option, though they bring challenges like the need for charging stations and specialized route planning. Urban Deliveries and City Design: As cities evolve with new designs and regulations, logistics companies must navigate dense urban areas with restricted access, limited parking, and stringent environmental policies. and cargo bikes, or partnerships for last-mile
28 September 2025 | Automation
deliveries.
Logistics networks often face restrictions due to pre-existing infrastructure, third- party logistics partnerships (3PLs), or local regulations. Establishing new distribution careful, data-driven planning to strategically map out these centres to meet demand and Sustainability Goals: Beyond reacting to external pressures, companies are setting their own ambitious sustainability targets. This includes reducing emissions, minimising waste, and increasing energy challenge for modern logistics companies. Location of Distribution Centres: Strategic placement of distribution centres has become more critical than ever. Factors such as proximity to urban areas, transportation infrastructure, and customer demand must be thoroughly considered. Locating distribution centres closer to transportation costs and environmental impact, while improving delivery speed. It’s essential to assess how changes in locations, centres or strategic closures, impact delivery times, costs, and customer satisfaction. In the pursuit of sustainability, optimising transport routes is essential for minimising fuel consumption and reducing emissions. Advanced planning and scheduling (APS) software is crucial in this process. Inventory Management inventory management is key to aligning distribution strategies with sustainability goals. Leveraging data analytics to guide
inventory distribution allows companies to better understand demand patterns, ensuring that products are positioned where they’re needed most. This improves both : In urban environments, reshaping the landscape of last-mile delivery. These smaller, localised hubs enable businesses to meet the increasing demand for faster deliveries, especially in congested areas where large-scale distribution centres
Emerging technologies: empowering transformation
Achieving a sustainable logistics network requires more than just operational adjustments – it necessitates the integration of advanced technologies that can shift the industry into high gear. The adoption of emerging technologies, such as AI, virtual twins, and IoT, is key to optimising and supporting sustainability initiatives. Virtual Twins: Virtual twin technology
creates digital replicas of logistics networks and enables businesses to test drive scenarios, decisions that enhance sustainability : These technologies support sustainable decision-making by providing insights that may not be visible through manual analysis. For instance, machine learning algorithms can continuously adapt delivery routes in real time to avoid areas with high congestion or emissions restrictions, ensuring that shipments are delivered in the most eco-friendly manner possible.
: IoT devices
improve supply chain visibility by providing real-time data on shipments, including location, temperature, and handling conditions. With track-and-trace capabilities, IoT empowers businesses to manage ad-hoc orders, contributing to improved This extract is from a longer feature, which can be found here:
DELMIA
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automationmagazine.co.uk
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