Sustainability is key for future success of the logistics industry

• Deutsche Post DHL unveils new study on green business trends
• “Delivering Tomorrow: Towards Sustainable Logistics” identifies key developments

• nAsian consumers are ready to pay more for green products, study shows

The pursuit of sustainability will transform the logistics industry, both in terms of its business model as well as the range of advanced solutions and technologies that will be used by logistics service providers. This is one conclusion drawn by the study “Delivering Tomorrow: Towards Sustainable Logistics”, which Deutsche Post DHL released recently as a follow-up to the 2009 Delphi Study on 10 top future trends. The new 150-page report concentrates on green logistics and the future of the industry and identifies key developments for the years to come. The study is based on in-depth research and contributions from international experts as well as a representative survey of 3,600 business customers and consumers worldwide.

 “We want to take a significant step forward to improving carbon efficiency and do our part to facilitate a low-carbon economy. The study provides valuable insights how our industry can achieve this goal,” said Frank Appel, Chief Executive Officer of Deutsche Post DHL, at a press conference in Shanghai today. “Sustainability, especially the reduction of carbon emissions, is already a central aspect of our business and an integral part of our corporate strategy. Customers worldwide increasingly demand greener logistics and are thus the best indicators for us that we are on the right track.” Deutsche Post DHL was the first logistics company worldwide to commit to a carbon efficiency target – 30 percent improvement by the year 2020 compared with 2007.

According to the study, the logistics industry will be key to comprehensive carbon reduction efforts in most sectors due to its unique expertise and positioning along the supply chain. Sixty-three percent of business customers believe that logistics will become a strategic lever for CO2 abatement. In addition to its strategic economic importance, logistics will increasingly be seen as essential to achieving lower carbon emissions across the economy. That´s a chance and a challenge as well for logistics service providers: Companies rated best-in-class in terms of environmental, social and governance practices outperform low-sustainability companies by up to eight percent. Furthermore, logistics will no longer be viewed as a commodity, where offering the cheapest solution rules. As a result, the leading logistics companies of the future will be those that provide sustainable services. The study also shows that significant carbon reductions can already be achieved within the logistics sector without waiting for major technological breakthroughs.

 “The logistics industry can achieve significant carbon reduction results today by making distribution networks more efficient, using the right modes of transportation and by managing load capacities and routes more efficiently,” said Appel. “Our aim with the study is to create a more focused debate. The report aims to show how business innovation and green demand can drive a carbon-efficient industry and lead to a low-carbon economy.”

The study also shows that carbon pricing mechanisms will accelerate a market-based dynamic toward more sustainable solutions. Once there is a real price tag attributed to carbon emissions, the environment will be an integral part of investment decisions. Especially customers in Asia are ready to accept that sustainable solutions may cause higher prices, the study shows. For example, 84 percent of consumers in China, India, Malaysia and Singapore say they would accept a higher price for green products – compared to only 50 percent in Western countries.

The sense of urgency regarding climate change is strongest in Asia (India, China), where 70 percent of consumers asked rated it as one of the world’s most serious problems. Deutsche Post DHL has seen over the past years that both factors, the acceptance of higher prices and the sense for climate protection, influences its business. For example, the number of CO2 neutral shipments by Deutsche Post DHL almost quintupled from 2008 to 2009 – from 145 million to 704 million.

The study on sustainable logistics was developed with support from a number of authoritative external experts from such institutions as MIT, Potsdam Institute for Climate Impact Research, National University of Singapore and the Technische Universität Berlin along with numerous experts from Deutsche Post DHL. Some of the Group´s customers, including Fujitsu, Henkel, HP, Unilever, and Walmart, also contributed to the report.