Increased adoption of green measures in the logistics industry will significantly contribute to reducing the nation's carbon footprint, on its path to reach a trillion dollar economy.
The Indian logistics industry transports over 4.6 billion tonnes of goods every year, amounting to an annual cost of INR 9.5 lakh crore. Land vehicles predominantly transport most goods across the country with railways, coastal and inland waterways, and airways making up for the rest. With predictions that the national freight activity could grow five-fold by 2050, both the dry and cold chain logistics sector will require more land vehicles to fulfill delivery demands in the coming years. India is aiming to become a 5 trillion dollar economy, with a heavy reliance on the supply chain sector to meet the goal. These factors combined could increase the industry’s cumulative energy consumption by 2050 to around 5.8 billion tonnes of oil equivalent.
In order to ensure that the industry can maximize its operations without increasing its carbon footprint, laying down sustainable practices have to be at the forefront of supply chain planning and management across the country.
We delve into some ways in which the logistics industry can venture into a sustainable future.
A report from KPMG states that increased technological investments will be a key focus for the supply chain industry in 2022. While this is a positive step, doubling down on sustainable systems will require significant commitment, restructuring, and optimization.
[box type=”shadow” align=”” class=”” width=””]Adoption of technological solutions will nudge the industry towards an automated future, requiring minimal intervention and reducing the sector’s energy consumption. Incorporating traceable blockchain technology in operations and supply chain management (OSCM), deploying cognitive planning, adoption of AI and IoT-based technology such as sensors and scanners, and building operations and monitoring systems around machine learning and predictive intelligence will lead the supply chain industry to a clean future.[/box]
En route sustainability
Along with tech adoption, the logistics sector needs to establish stringent initiatives and meticulous planning for vehicular movements. A major concern that the industry will have to address would be back hauling. India’s freight movement is expected to cross 15.6 trillion tonne-km by 2050 and back hauls contribute significantly to that.
With solutions like route mapping to minimize stalling, shipment consolidation to avoid multiple trips, and optimizing vehicle size and load can help turn most back hauls to back loads. This, when coupled with revised practices like building inventory storage facilities closer to customers, enhancing the efficiency of last mile deliveries and returned goods, and optimizing risk mitigation processes, can ensure that accountability is at the forefront of supply chain management.
Sustainability in packing and storage
India generates 9.46 million tonnes of plastic waste per year and food and agricultural packaging accounts for up to 40% of this. The supply chain sector, invariably, has to adopt sustainable packaging materials to reduce the environmental impact of non-biodegradable materials.
[box type=”shadow” align=”aligncenter” class=”” width=””]While several manufacturers are shifting to zero-waste packaging, their efforts could go in vain if tertiary packaging is not decomposable. The cold chain sector has made a commendable shift towards using Phase Change Material in place of dry ice, as dry ice can be harmful if not disposed of correctly.[/box]
Increased investments towards research on alternatives to plastic will enable the supply chain sector to overhaul its packaging solutions to make it recyclable, reusable or compostable.
Towards a green future
India’s logistics costs are currently 14 percent of the country’s GDP and over 90 percent of the costs are attributed to transportation and inventory management. Opting for cleaner practices is pivotal for an industry that runs on supplying the needs of the country. Whether it is through cleaner packing materials, sustainable manufacturing practices, or reducing carbon emission during transportation, the sector will have to address these challenges inevitably.
With the right practices and a collaborative approach to sustainability, it is possible to reduce the sector’s energy consumption by 50%.
[author title=”Author” image=”http://”]Swarup Bose, founder & CEO, Celcius Logistics Solutions[/author]