Responsibility

Sustainable logistics: 6 high-impact trends reshaping business

With the climate crisis never far from the headlines, companies face mounting pressure to cut greenhouse gas (GHG) emissions and embrace sustainable practices. Logistics is a great place to start, and there are multiple pathways to more sustainable supply chains. But how do you know which ones will have the most impact? Here we look at some of the latest sustainability trends in logistics.

Mapping the journey: How sustainability will impact the future of logistics

Logistics is more than just getting goods from point A to point B. It's the backbone of global trade. But as our planet grapples with mounting environmental challenges, the path forward isn't about taking minor detours or opting for quick fixes. It's about charting an entirely new route that reimagines how we transport, store, and deliver goods.

As companies work to decarbonize, they are looking at how to make improvements at every link in the supply chain. In fact, for businesses looking to stay competitive, integrating sustainable practices will not just be a nice to have – it will be the turbo boost they need to outpace regulations, meet customer demands, and leave the competition in the dust.

But even the savviest business navigators will need a reliable map to stay on course. That’s where DHL’s Logistics Trend Radar comes in, plotting the most promising routes. Here we look at six of the top trends in sustainable logistics.

Sustainability cluster in the Logistics Trend Radar 7.0

The Latest Trends in Sustainable Logistics

The DHL Logistics Trend Radar 7.0 has identified eleven sustainability trends. These six trends are expected to have a high impact on the logistics industry in the next 5-10 years.

Trend 1: Decarbonization

Picture the logistics industry as a massive ship sailing toward a greener horizon. At the helm is decarbonization – the push to slash greenhouse gas emissions, especially carbon dioxide. With supply chains responsible for around 60% of global carbon emissions, it’s a critical mission for sustainability in the logistics sector. While many businesses have ambitious net-zero targets, they face challenges, including the lack of standardized carbon accounting practices, financial risks associated with new technologies, and the need for hefty upfront investments. Despite these hurdles, the winds of change are propelling the industry into a race where genuine decarbonization isn't just about staying afloat – it's about leading the pack.

Trend 2: Sustainable Fuels

Sustainable fuels have huge potential to become the driving force in reducing fossil fuel dependence and cutting emissions. These fuels, ranging from conventional biofuels to advanced synthetic e-fuels, currently offer the most effective solution for more sustainable logistics at scale, particularly in aviation and maritime shipping. The logistics industry can’t yet take full advantage of this due to high costs and low availability. Momentum appears to be building, with investments of over US$150 billion in sustainable fuel production capacity announced. But progress could be slowed by limited feedstock availability, potential environmental trade-offs, inconsistent standards, supply shortages, and the complexity of the various fuel types and technologies.

Trend 3: Vehicle Electrification

Electric vehicles (EVs) will be a critical trend to watch in the evolution of sustainability in logistics, with their numbers forecast to surge from 45 million in 2023 to a staggering 525 million by 2035. This gear shift is crucial for logistics and supply chains, as road freight currently accounts for 70% of overland transportation emissions. Improving charging infrastructure and battery technology will increase the number of electric trucks and vans. While demand and supportive policies drive change, the road ahead isn't without its potholes. Speed bumps include infrastructure limitations, range concerns, payload capacity issues, and higher upfront costs.

Trend 4: Circularity

Circularity, the concept of creating closed-loop systems where products and materials are continuously reused and recycled, is also fueling supply chain transformation. Indeed, the logistics sector is poised to become the backbone of a more sustainable future. Progress has been gradual, with only 55% of large businesses committing to circularity initiatives, but new legislation like the European Commission’s 'right to repair' rules are jumpstarting this shift. Challenges include products not designed for reuse, consumer resistance, limited data transparency, and complex supply chain restructuring.

Trend 5: Renewable Energy Infrastructure

Renewable energy infrastructure will be another critical component powering the journey toward sustainable logistics and supply chains. The development of networks for generating, transmitting, and storing energy from sources like solar, wind, and hydropower is expected to pick up speed in the years ahead. With renewables projected to account for 45-50% of power generation by 2030 and 65-85% by 2050, the logistics sector faces both opportunities and challenges in the future. The growing fleet of electric vehicles and carbon-neutral facilities require robust charging infrastructure and onsite power generation. But obstacles also lie ahead in the form of high initial investments, the need for advanced smart grids, and reliance on government policies for grid stability.

Trend 6: Advanced Analytics

Last but not least, advanced analytics in logistics and supply chain management will have an impact that cannot be overstated. The sophisticated techniques and tools used to analyze and interpret data will allow us to gain actionable insights, such as identifying areas with the greatest potential for improvement or forecasting consumer behavior or weather patterns with predictive modeling. Such data-driven decision-making can significantly enhance operational efficiency and sustainability, not to mention improve customer satisfaction and competitiveness. There will be many technical, security, and data privacy challenges, but advanced analytics promises to enhance the capabilities of supply chain managers and even revolutionize how logistics and supply chains operate.

The trend is clear for sustainable logistics

45-50%

of power generation is estimated to come from renewables by 2030

525 million

electric vehicles are expected to be on the roads in 2035

>$150 billion

of sustainable fuel production capacity investments have been announced

^{Source: DHL Logistics Trend Radar 7.0}

Blazing a trail toward more sustainable logistics and supply chains

These interconnected sustainability trends are driving the logistics industry towards a more sustainable tomorrow. Sustainable fuels and renewable energy infrastructure will be especially pivotal in reducing emissions and enabling greener supply chains. But the industry’s success will depend heavily on supportive policies and substantial investments. Governments and industry leaders must work together to create a favorable regulatory environment and channel resources into these green technologies. As the logistics sector undergoes this transformation, early adopters and innovators will show the way forward. The race to logistics sustainability is on, with high stakes for both the industry and the planet.

Published: November 2024