The evidence is clear. eCommerce’s share of global retail trade went from 14% to 17% in 2020 alone. Meanwhile, last-mile delivery in urban areas is expected to increase 78% by 2030, meaning 36% more delivery vehicles on the road.
All this equates to unsustainable supply chain activity driven by ecommerce. To mitigate the negative impacts of this necessary and growing industry, ecommerce leaders must first understand what the new economy means in terms of sustainability.
A new world for ecommerce and supply chains
First, the effects of ecommerce delivery should be understood through the lens of how the market has shifted in the wake of the pandemic. The landscape is different for all those involved in a supply chain – from raw material suppliers to last-mile delivery drivers.
That 3% increase in the share of global retail means millions of packages going out in different directions as consumer behavior changes in an unprecedented direction.
Now, ecommerce is transforming supply chains. These are just some of the ways the world of digital sales and supply chains looks radically different from what it once did:
- Amazon has risen to dominate the market with 20% lower shipping costs than that of other multichannel retailers
- COVID-19 led to demand fluctuations for all kinds of items, with products like oat milk experiencing sales increases of as much as 305%
- Real-time data systems have become integral to supply chain efficiency
eCommerce revolves around real-time communication between buyers on a digital storefront. For businesses to keep up with this virtual marketplace, they need constant updates on the supply and demand side of the chain.
This demands the application of smart devices like sensors and monitors on the Internet of Things (IoT), which can then report information back to centralized management dashboards. From industry data to in-house inventory, these dashboards offer powerful insights into the world of ecommerce supply chains and their effects on global sustainability.
This means an enhanced ability to innovate for businesses now no longer confined to guesswork. But just as progress has been made to decarbonize ports and supply lines with clean power like green hydrogen, a changing economy threatens sustainable progress.
How rising ecommerce demand impacts sustainability
eCommerce has brought much-needed safety and convenience to many at-risk people for the pandemic. However, our addiction to this convenience could end up causing irreparable harm to the climate.
According to a report by the World Economic Forum, the growth of the ecommerce delivery ecosystem could ramp up congestion on the average commute and create six million more tons of CO2 in the atmosphere by 2030. This means longer times idling in traffic and a more polluted environment unless industries unite to mitigate this rising impact.
But as it stands, ecommerce activity is contributing heavily to the two billion tons of waste that goes into landfills every year. Meanwhile, the same World Economic Forum report states that delivery-related carbon emissions could increase by more than 30% in the world’s top 100 cities by 2030.
Supply chains will have to change if they are to continue to produce the kinds of value customers expect from quick-delivery online shopping. In fact, expectations will likely have to change as well, since a slower delivery process can be both greener and better overall in terms of quality.
Fortunately, major global businesses are adopting cleaner practices through mutually beneficial partnerships. For instance, Mainstream and Siemens united in creating community-supporting, local supply chains powered with wind energy.
Examples like this one prove that sustainable ecommerce solutions are possible. However, it will take significant effort as well as cutting-edge technology for supply chains to integrate these solutions.
Creating sustainable ecommerce solutions
The good news is that all kinds of devices are available to aid ecommerce and supply chain companies in their efforts to develop more sustainable and efficient procedures. From GPS to AI, the range of smart tools at our disposal lend transparency and insight across the entire supply chain.
For instance, GPS tracking in commercial trucking leads to more efficient delivery routes and money saved for the deliverer. This is possible because GPS offers real-time data, which dispatchers or AI systems can analyze to inform drivers of the fastest routes, necessary detours or potential hazards.
From here, supply chain managers can promote greater safety as well as fuel efficiency. But this is just a measure of what is possible through autonomous vehicles and drone technology, which could transform ecommerce supply chains altogether in the coming years.
Already, AI has enabled a level of self-driving functionality in vehicles. Fully autonomous vehicles – especially electric ones – could revolutionize last-mile supply chain issues to reduce both traffic congestion and CO2 emissions. Meanwhile, AI-powered supply chain information systems can offer ecommerce companies analytics at a glance that then helps them improve their energy efficiency.
As we explore the full impact of ecommerce delivery on supply chain sustainability, modern technology can help us do better. From AI to the IoT, these innovations offer complete transparency over the supply chain, including its sustainable features.
Explore the potential of smarter tools that can help you cut waste and pollution in your own operations. However, be sure that the tools you adopt don’t increase your dependence and consumption of nonrenewable fuels.
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