By Gilbert Abi Zeid, Vice President – Logistics, GMG
As we commemorate World Environment Day, it’s essential to recognise the pivotal moment at which the global logistics industry finds itself. The growing demand for efficient and seamless supply chains is colliding with the pressing need for sustainability. Environmental concerns have taken centre stage, driving logistics toward sustainable practices and technologies. This transformation is not merely a moral imperative but a strategic necessity for businesses aiming to maintain their competitive edge in a rapidly evolving world.
The stakes are high – a European Environment Agency study warns that the logistics sector could be responsible for up to 40% of global carbon dioxide emissions by 2050 if effective measures are not implemented. Forward-looking logistics companies are consequently increasingly focusing on sustainability, taking concrete steps to minimise the environmental impact of their operations. These initiatives include carbon offsetting, optimising transport routes to reduce emissions, and transitioning to electric vehicles. Changing consumer attitudes are driving this shift, as evidenced by a Bain survey that found consumers are willing to pay a 12% premium for sustainable products.
Contrary to the widespread belief that sustainable and inclusive growth requires sacrificing revenue and profit, a McKinsey analysis suggests that financially successful companies that integrate environmental, social, and corporate governance (ESG) priorities into their growth strategies outperform their peers. The report reveals that these companies generate up to 7 percentage points in additional annual total shareholder return (TSR) compared to their peers. This finding underscores the fact that a strong commitment to ESG creates additional shareholder value for companies, making sustainability a smart business strategy.
The logistics industry already possesses inherent strengths to lead the renewable energy push – expansive real estate and expertise in managing complex interwoven systems. Warehouse rooftop space can be utilised for utility-scale PV solar installations, while grounds can be covered in greenery.
Aligned with this trend, GMG is setting new benchmarks for sustainable supply chains through its logistics division, Trilogi. Its investment in renewable energy solutions in warehouses and distribution centres, such as rooftop solar installations, significantly reduces its logistics carbon footprint and proves green energy’s feasibility in the supply chain sector. For example, the company has installed a 3,515 kWp rooftop solar installation at its Mega Distribution Center in the Jebel Ali Free Zone. This project offsets over 80% of the warehouse’s power consumption and reduces CO2 emissions by around 70,000 tons.
GMG followed that with a company-wide effort to plant the culturally significant Ghaf tree at the same site and the installation of an advanced wastewater treatment system. With a capacity of 16,000 gallons, this system effectively treats 12,000 gallons of wastewater, reflecting a strong commitment to water resource management.
Technology supercharges sustainability
There’s an unmistakable excitement in the industry over the latest artificial intelligence advances. AI is a game-changer in the logistics sector, offering immense potential for optimising supply chain processes, reducing waste, and minimising environmental impact. Advanced algorithms can leverage the vast amounts of data retail operations produce to forecast demand with unparalleled accuracy, enabling logistics providers to optimise inventory levels and reduce overstocking, contributing to unnecessary energy consumption and waste. Furthermore, AI-driven route optimisation minimises fuel consumption and emissions by identifying the most efficient transportation routes and consolidating shipments. As AI continues to evolve, its potential to revolutionise sustainable logistics grows exponentially, making it an indispensable tool for companies seeking to reduce their carbon footprint.
Second, the vision of fully autonomous warehouses is within reach. Such facilities leverage advanced robotics, automated storage and retrieval systems (ASRS), and intelligent conveyor networks to significantly reduce energy consumption and minimise waste. Automated systems optimise storage space utilisation, reducing the need for expansive, energy-intensive facilities. Automated warehouses can even operate in the dark, further reducing energy usage. They also contribute to a more sustainable logistics ecosystem by streamlining processes and minimising human error, setting the stage for a greener future.
Third, autonomous delivery vehicles hold immense promise for sustainable logistics, offering a path toward zero-emission transportation. As self-driving technology advances, logistics providers are exploring the potential of electric, autonomous vehicles to revolutionise last-mile delivery. These vehicles optimise real-time routes, reducing fuel consumption and emissions while improving delivery efficiency. They also can operate 24/7, maximising asset utilisation and reducing the need for additional vehicles on the road.
In a significant development, Dubai’s Roads and Transport Authority (RTA) announced the pilot launch of autonomous food delivery robots at Dubai Silicon Oasis last year. This initiative highlights the growing importance of autonomous delivery solutions in the logistics industry and their potential to reduce emissions and improve efficiency in last-mile delivery.
As the world grapples with the urgent need to combat climate change and build a more resilient future, the logistics industry has a unique opportunity to lead the way. By embracing sustainable practices and technologies, logistics providers can reduce their environmental footprint and drive innovation, efficiency, and long-term growth. The sustainable logistics revolution is no longer a distant vision; it is a present reality, and the companies that embrace it will shape the future of the industry and our planet. As consumer demand for sustainable products and services continues to grow, logistics companies prioritising sustainability will be well-positioned to meet the evolving needs of their customers and contribute to a greener, more sustainable future for all.