Accelerated online buying is pushing companies to implement electrification, efficiency, and eco-friendly materials in supply chains, DHL research shows.
E-commerce is changing approaches to sustainability in the United States—especially in the supply chain, where companies are investing in electrification, efficiency, and eco-friendly materials, according to research from express delivery and logistics firm DHL, released June 3.
Researchers say the rapid growth of e-commerce is yielding immediate opportunities to reduce emissions in the supply chain while also challenging retailers, logistics companies, and policy-makers to collaborate on ways to address environmental issues. The DHL/Morning Consult survey of U.S. consumers was conducted in May, and findings were released in a white paper titled “ECO-mmerce: How online retail can build the sustainable supply chain of tomorrow.”
More than half of respondents (54%) said their online shopping habits increased during the Covid-19 pandemic, and the majority (60%) said they are willing to pay more for environmentally friendly products and services. What’s more, 54% said they put more trust in a company based on its public commitments to environmental sustainability, listing carbon emissions, green energy, waste, alternative fuels, and sustainable packaging as the five most important factors in helping the environment.
Researchers said the survey results reflect the influential role supply chain sustainability will play in the competitiveness of e-commerce businesses in the future.
“E-commerce is fundamentally reshaping our customers’ supply chains, challenging them to redesign their transportation and warehousing networks in order to accommodate customer demand across multiple channels, address changes in trade and inventory flows, and be more responsive to the market,” Kraig Foreman, president of eCommerce, DHL Supply Chain North America, said in a statement announcing the release of the white paper. “At the same time, [we] see this as a historic opportunity to build more sustainable supply chains from the bottom up, by reengineering processes with efficiency and emissions reductions in mind, taking advantage of new, greener technologies at all stages of the order cycle, and exploring innovative ideas in areas such as packaging and the circular economy.”
The white paper examined five segments of the e-commerce supply chain researchers said are most exposed from a sustainability perspective: the last mile, the first and mid-mile, warehousing, packaging, and returns. Results revealed three areas that are likely to have the greatest potential impact on those segments: cleaner energy, via more electrification of transportation fleets and warehousing operations; increased efficiency, supported by data and technology; and eco-friendly materials, particularly in packaging.
“E-commerce is already having a net positive impact on the environment compared to traditional retail in a number of areas, such as replacing multiple passenger car trips with single round trips with delivery vans, and accelerating investments in greener transport and warehousing technologies,” according to the report. “In other areas, the potentially negative impact of some trends, such as a proliferation of smaller warehouses closer to customers, is being offset by other effects such as the optimization of retail networks and the introduction of greener energy supplies and automated equipment.”
The white paper follows DHL’s updated commitment to sustainability, announced in March. The company’s new “sustainability roadmap” reiterates its goal to achieve net zero transport-related emissions by 2050 and outlines goals in several areas, including: an approximately $8.5 billion investment in green solutions; expansion of its fleet of electric vehicles to 80,000 worldwide; and plans to increase the share of sustainable fuels used in its long-haul transportation by 2030.
The white paper was produced with the support of FINN Partners’ Global Supply Chain, Logistics & Transportation Practice, and incorporates insights from executives of DHL’s express, supply chain, and e-commerce business units in the United States.
The Port of Los Angeles plans to build a $52 million on-dock rail expansion at its Fenix Marine Terminal, saying the project will expand capacity and cargo efficiency while providing environmental benefits.
The investment follows several similar moves to expand rail access at other U.S. ports, including an $83 million project at the Port of Virginia, a $73 million rail expansion project on Pier 400 at the Port of Los Angeles, and ongoing work on a $127 million rail cargo facility at the Georgia Ports Authority.
Users of the port facilities cheered the expansion, which is planning to begin construction next year. “This investment ensures that there is adequate on-dock intermodal capacity to accommodate future volume growth, enabling POLA and FMS to further compete for discretionary cargo in an environmentally and community responsible way,” George Goldman, President & CEO of CMA CGM (America), said in a release.
Specifically, the project will add five loading/unloading tracks in the intermodal yard at the port’s Pier 300 terminal. The improvement will increase on-dock railyard capacity, enabling more cargo to be loaded directly onto trains via the on-dock railyard within the terminal. That shifts freight volume off of trucks, since rail is the most energy and fuel-efficient means of long-haul freight movement within the continental U.S., port leaders said.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
“Unrelenting labor shortages and wage inflation, accompanied by increasing consumer demand, are driving rapid market adoption of autonomous technologies in manufacturing, warehousing, and logistics,” Seegrid CEO and President Joe Pajer said in a release. “This is particularly true in the area of palletized material flows; areas that are addressed by Seegrid’s autonomous tow tractors and lift trucks. This segment of the market is just now ‘coming into its own,’ and Seegrid is a clear leader.”
According to Pajer, Seegrid’s strength in the sector is due to several new technologies it has released in the past six months. They include: Sliding Scale Autonomy, which provides both flexibility and predictability in autonomous navigation and manipulation; Enhanced Pallet and Payload Detection, which enables reliable recognition and manipulation of a broad range of payloads; and the planned launch of its CR1 autonomous lift truck model later this year.
Seegrid’s CR1 unit offers a 15-foot lift height, 4,000-pound load capacity, and a top speed of 5 mph. In comparison, its existing autonomous lift truck model, the RS1, supports six-foot lift height, 3,500 pound capacity, and the same top speed.
The “series D” investment round was funded by existing lead investors Giant Eagle Incorporated and G2 Venture Partners, as well as smaller investments from other existing shareholders.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”