Circular Deliveries: Greening Retail Logistics

With the rise of e-commerce and the growing demand for convenient and fast deliveries, the environmental impact of retail logistics has become a pressing concern. Traditional linear supply chains that involve the extraction, production, distribution, and disposal of goods generate significant carbon emissions and contribute to resource depletion. To decouple environmental impacts from business growth, there is a growing movement towards circular deliveries that focus on optimising the delivery process by incorporating circular economy principles.

In the context of deliveries, circular logistics involves rethinking traditional linear supply chain models and implementing strategies to close the loop and create a more sustainable system. Here are some key strategies for circular deliveries:

1. Packaging Optimisation: Circular deliveries prioritise reducing packaging waste by employing eco-friendly materials and right-sizing packaging to minimise empty space. By using reusable or recyclable packaging and eliminating unnecessary materials, retailers can significantly reduce the environmental impact associated with packaging waste.
2. Reverse Logistics: Reverse logistics involves the efficient management of product returns, repairs, and recycling. Retailers can establish streamlined processes to handle returned items, refurbish them if possible, and resell as second-hand goods. This not only reduces waste but also extends the lifespan of products.
3. Collaborative Transportation: Collaborative transportation, such as shared delivery networks or crowd-shipping platforms, allows multiple retailers to consolidate their shipments and optimise delivery routes. By sharing transportation resources, retailers can reduce the number of vehicles on the road, leading to lower emissions and cost savings.
4. Last-Mile Optimisation: The last-mile delivery is often the most carbon-intensive and costly part of the logistics process. Circular deliveries focus on optimising last-mile operations by implementing strategies such as route optimisation, delivery consolidation, and the use of low-emission vehicles like electric bikes or vehicles powered by renewable energy sources.
5. Local Sourcing and Production: By promoting local sourcing and production, retailers can reduce the distance that products travel, thereby minimising carbon emissions associated with long-distance transportation. Localised production also offers opportunities for more efficient inventory management and faster turnaround times.

Data and technology, collaboration among other retailers and logistics providers and education will play a role in implementing the above strategies.

Circular deliveries present a promising approach to greening retail logistics. By adopting circular economy principles, retailers can significantly reduce their carbon emissions, waste generation, and resource consumption. At the same time, retailers can enjoy cost savings from reduced material and fuel costs and enhance their brand reputation and attract environmentally-conscious customers who appreciate businesses that prioritise sustainability. As the focus on sustainability continues to grow, embracing circular deliveries is a crucial step towards building a more sustainable and resilient retail industry.

Make sure not to miss the opportunity to acquire valuable insights from industry experts by participating on Day 2 of ReThink HK 2023. The panel, led by KPMG's Eddie Ng , feature Judy Ho from Swire Coca-Cola, Eric Swinton from V Cycle Company Limited and Cerin Yip from Alibab Group. Together, they will discuss "Circular Deliveries: Greening Retail Logistics," shedding light on the existing landscape of retail logistics in the city. Moreover, they will emphasise the current use cases of corporations in Hong Kong and outline the ongoing opportunities for adopting green logistic practices.