Retailers step up sustainable logistics activities

Two big consumer brands – IKEA and About You – are speeding up their sustainability strategies, including for logistics, with new demands on delivery partners, they said at Parcel + Post Expo in Frankfurt last week.

For its part, Deutsche Post DHL explained at the same conference session how it is investing heavily in more environmentally friendly operations in Germany to reduce its CO2 emissions under long-term corporate targets.

`Climate-positive` IKEA

Swedish furniture giant IKEA has an ambitious sustainability strategy to become ‘People & Planet Positive’, including ‘Circular & Climate Positive’ by 2030, Rene Horsch, customer fulfilment sourcing manager at IKEA Germany, told conference participants.

He explained that the home products retailer is already climate-positive in Germany because its windparks and solar farms across the country generate more electricity in total than the company actually consumes.

“Sustainability before price”

In terms of logistics, IKEA wants all of its deliveries to be emission-free by 2025 compared to just 5% at present. This includes last-mile deliveries by truck and of bulky consumer products requiring installation in kitchens.

Horsch stressed to an audience of postal and parcel managers that “sustainability is a bigger tender factor than price”. He declared: “The one who is sustainable will have an advantage over the one who is cheaper.”

ESG for fashion

Similarly, fast-expanding German fashion platform About You, whose turnover has soared to over €1.7 billion since launching in 2014, is developing a comprehensive ESG strategy, including reducing and compensating for its carbon emissions.

Magnus Dorsch, the company’s senior project manager sustainability, explained how the company is reducing packaging (or using more recycled materials) and has set science-based targets for its warehousing and transport operations.

He noted that About You has launched Fulfilment As A Service for third-party retailers and is gearing up for introduction of the new German Supply Chain Law, which enters force next year and will affect the company from 2024 onwards.

Customer demands

In a keynote presentation, Nikola Hagleitner, the new CEO of Deutsche Post DHL’s Post & Parcel Germany division, stressed that more and more German companies are setting targets to reduce their CO2 footprint, and thus require domestic and international solutions for carbon-free deliveries.

“Our business customers want to reduce their carbon emissions throughout their whole value chain, including transportation of documents and goods,” she underlined. In particular, consumers are putting ever more pressure on these companies to reduce their environmental impact.

Consumers are also starting to act as well as demand. Hagleitner said that 6% of DHL’s parcels in Germany are now being transported by rail through a new ‘green delivery` option that takes one extra day. “For a portion of the population, speed is not the priority,” she commented.

Insetting and offsetting

Outlining DP DHL’s own sustainability activities, Hagleitner said the postal group is developing more and more ‘insetting’ activities to avoid and reduce emissions, in addition to ‘offsetting’ its emissions.

In particular, DP DHL is investing €600 million in Germany on diverse sustainability measures, including expanding the electric vehicle fleet from 20,000 at present to 38,000 by 2025, and opening 100 CO2-neutral delivery bases across the country.

In addition, DHL is testing climate friendly fuels such as hydrogen and has installed gas stations on its own premises to supply its fleet of gas-powered vehicles, she pointed out.