GREEN LOGISTICS - WHAT IT REALLY MEANS

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Fortunately for me - as those of you know me will understand! – logistics isn’t a trendy part of business. But even so, from time to time it gets pushed into the limelight. And that’s happened this year. Suddenly, “green supply chains” and “eco-logistics” are on everyone’s lips.

I must admit, I’m usually sceptical about trends like this. But this time I’m taking notice. That’s because, as well as all the PR-speak, there are real economic forces pushing us to use less oil and reduce CO2 emissions.

Now I don’t know what the future holds. But what I do know is that long-term changes must have a firm foundation in economic facts. So I’m going to tell you about three changes that I think will happen – sooner or later – and not because they’re fashionable, but because there are real causes driving them.

#1: LOCAL SOURCING WON’T BE A BIG DEAL

Moving things from one place to another emits carbon – and in a way that’s easy to understand. That’s why we hear so much about “food miles” and local sourcing.

And so reducing the distance we move things seems to be a no-brainer, doesn’t it?

But in fact local sourcing is a distraction. It’s never going to be more than window-dressing – something to look good in the Annual Report. Here’s why. Imagine that you drive to your local shopping centre to buy a shirt that’s been made in China. This may come as a surprise to you – but your car has emitted almost half of all the carbon needed to move that shirt from China to your house.

So in the long run the big changes will have to be at the customer’s end of the supply chain – because that’s where the emissions are. Now, I don’t know exactly what these changes are going to be – but here are a few things that could just happen:

- a huge increase in home delivery, for all sorts of products

- the development of local collection points that you can walk to, for all those things we’ve ordered on-line

- the gradual decay of the big out-of-town shopping centres

#2: LOGISTICS IS GOING TO BE A TWO WAY-STREET

When you think about carbon emissions in the supply chain, it’s natural to think of trucks driving up and down our motorways. You can almost see the carbon! But our supply chains emit carbon in many other ways, and we can’t ignore them just because they’re not so visible. For example, an astonishing 33% of supply chain emissions are related to packaging.

So I’m convinced that we’re going to see a gradual change from one-way packaging to returnable packaging. For years, reverse logistics has been the poor relation of supply chain management. We’ve all been interested in how we get our product to our customers. After all, that’s how we add value. But now, we’re going to have to get interested in the other direction as well.

So here’s a career tip for you – get expertise in reverse logistics on your CV. It’s going to be a skill that’s in demand!

#3: "JUST IN TIME" WON’T GO OUT OF FASHION

So far I’ve told you about what’s going to change. Now I’m going to tell you about something that’s going to stay the same.

You’ll hear people say that we’ll have to get rid of “Just In Time” production if we want to reduce carbon emissions. For sure, one of the features of JIT is that you make deliveries little and often rather than in large batches. And it’s obvious that lots of small deliveries emit more CO2 than a small number of large deliveries.

But people who tell you this don’t understand what JIT is really all about. The whole point of JIT is to cut out waste. You only manufacture – or move – something if you know there’s a customer for it. And although it may seem more efficient to move products in large batches – it isn’t if you don’t sell it.

I think of this every time I buy my Sunday paper. When I get it home, the first thing I do is throw away all the bits I don’t want – and that’s probably about a third of it. Just think of all the energy used to make the newsprint, print the pages, and transport them to my newsagent – only for them to go straight in the bin.

The best way to reduce emissions is to stop making, moving, and storing things nobody wants – so the principles of JIT are going to become more important – not less.

Now I know this month’s letter is a bit unusual because I haven’t given you anything you can act on right away. But although I’m a great believer in doing things – not just thinking about them - we all need to look further ahead from time to time.

Otherwise, we find the world’s changed – and we’ve been left behind.