MBN USA

June 23, 2021

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Sustainability and tech are driving change in transportation and logistics

By Suzanne Beckham Squyres

Transportation and logistics companies are looking beyond the pandemic-fueled surge in business of the past 18 months. Unwilling or unable to buy items in brick-and-mortar stores, shoppers took to the internet and bought items to be delivered in record numbers. Whether the swell in orders and deliveries is part of an extended new normal remains to be seen, but operators in the logistics arena want their suppliers to be prepared for what comes next.

Sustainable practices

Companies in the transportation and logistics industry have made a commitment to integrate sustainable initiatives into their operations.

United Parcel Service Inc. subsidiary UPS Flight Forward Inc. has ordered electric vertical takeoff and landing, or eVTOL, aircraft for deliveries in small and midsize markets. The aircraft can take off from or land on roofs and does not require landing strips, thus reducing transit time, operating costs and vehicle emissions.

“This is all about innovation with a focus on returns for our business, our customers and the environment,” said UPS Chief Information and Engineering Officer Juan Perez. “These new aircraft will create operational efficiencies in our business, open possibilities for new services and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operations.”

After the batteries’ first life cycle in the aircraft concludes, they can be fitted to the charging stations to recharge UPS’s fleet of electric ground vehicles. UPS currently operates more than 12,000 alternative fuel and advanced technology vehicles.

Battery technology offers possible solutions for BNSF Railway Co., as well, as the company pursues ways to further reduce its environmental impact. In January, it began exploring the potential of battery-electric locomotives between Barstow and Stockton, California. In May, the company announced that the locomotive pilot test met expectations for efficiency and performance and warrants further exploration of the technology.

Increasing efficiency, lowering emissions and decreasing costs support BNSF’s vision of sustainably moving freight, according to John Lovenburg, BNSF vice president, environmental. “We’re committed to doing our part to test and assess the commercial viability of emerging technologies that reduce emissions.”

DHL International GmbH will deploy 89 zero-emission medium and heavy-duty delivery vehicles by the end of 2021 and expand its network of global retail locations by opening mobile, pop-up, solar-powered units. Not only will the retail sites provide increased accessibility, they will reduce the company’s carbon footprint.

FedEx Corp. has taken several steps to reach its carbon neutral goal. By 2040, its entire parcel pickup and delivery fleet will be zero-emission electric vehicles, and it will invest in alternative fuels to reduce aircraft emissions.

“We have a responsibility to take bold action in addressing climate challenges,” said FedEx Chairman and CEO Frederick W. Smith. “This effort builds on our longstanding commitment to sustainability throughout our operations, while investing in long-term, transformational solutions for FedEx and our entire industry.”

Technological advances

While sustainability is a long-term goal for transportation and logistics firms, technology will continue to drive change in the industry. Digital transactions, e-commerce and data analytics provide the ability to address constantly changing needs. Trends that have the potential to accelerate these shifts include:

• The growing use of artificial intelligence or AI allows transportation and logistics companies to forecast and manage inventory and address variable demands across supply-chain operations.  Historical data from past operations can help AI algorithms conduct primary operations automatically, reducing human error in the supply chain.

• The use of blockchain solutions in the transportation and logistics realm has emerged as a solution to increase efficiency and track products. It would also reduce malicious activity and falsification of data. Adoption of this technology has been slow, but it is viewed by many in the industry as a game-changer that will foster universal standards.

• The 5G mobile broadband standard promises to innovate the T&L sector by accommodating faster transfer speeds for more data and, in turn, increase visibility throughout the supply chain. With the development of 5G technology — thought to be more secure and 100 times faster than current technology — logistics processes can be faster, safer and more reliable.

• Reverse logistics or returns present a significant challenge because they are unpredictable, expensive and difficult to manage. Retailers report that 6% to 8% of all in-store merchandise sold is returned, while roughly 30% of e-commerce sales are returned. Reverse logistics includes returns, remanufacturing, packaging, repairs and maintenance, refurbishing and recycling. Reverse logistics technology will increasingly be used to reduce costs and increase inventory recovery and visibility.

• Last-mile delivery represents 41% of the cost of business-to-consumer shipping because the final leg of shipment typically involves multiple stops with only one or two packages getting dropped off. Shippers will increasingly rely on delivery software and service companies to leverage technology to make local drop-off services more efficient, profitable and consumer-friendly.

To learn more about the companies featured in this article, visit UPS.COM, BNSF.COM, DHL.COM and FEDEX.COM.