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Green is the Color of Logistics' Future

The pursuit of sustainability will transform the logistics industry, both in terms of its business model as well as the range of advanced solutions and technologies that will be used by logistics service providers, according to a new study released by Deutsche Post DHL as a follow-up to the 2009 Delphi Study on ten top future trends. The study is based on research and contributions from international experts as well as a representative survey of 3,600 business customers and consumers worldwide.

Deutsche Post DHL has committed to a carbon efficiency target of 30% improvement by the year 2020 compared with 2007.

According to the study, the logistics industry will be key to comprehensive carbon reduction efforts in most sectors due to its unique expertise and positioning along the supply chain. Sixty-three percent of business customers believe that logistics will become a strategic lever for CO2 abatement. In addition to its strategic economic importance, logistics will increasingly be seen as essential to achieving lower carbon emissions across the economy. That´s a chance and a challenge as well for logistics service providers:

Companies rated best-in-class in terms of environmental, social and governance practices outperform low-sustainability companies by up to 8%. Furthermore, logistics will no longer be viewed as a commodity, where offering the cheapest solution rules. As a result, the leading logistics companies of the future will be those that provide sustainable services. The study also shows that significant carbon reductions can already be achieved within the logistics sector without waiting for major technological breakthroughs.

“The logistics industry can achieve significant carbon reduction results today by making distribution networks more efficient, using the right modes of transportation and by managing load capacities and routes more efficiently,” says Frank Appel, CEO of Deutsche Post DHL. “Our aim with the study is to create a more focused debate. The report aims to show how business innovation and green demand can drive a carbon-efficient industry and lead to a low-carbon economy.”

The study also shows that carbon pricing mechanisms will accelerate a market-based dynamic toward more sustainable solutions. Once there is a real price tag attributed to carbon emissions, the environment will be an integral part of investment decisions. Especially customers in Asia are ready to accept that sustainable solutions may cause higher prices, the study shows. For example, 84% of consumers in China, India, Malaysia and Singapore say they would accept a higher price for green products, compared to only 50% in Western countries.

The sense of urgency regarding climate change is strongest in Asia (India, China), where 70% of consumers asked rated it as one of the world’s most serious problems. Deutsche Post DHL has seen over the past years that both factors, the acceptance of higher prices and the sense for climate protection, influences its business. For example, the number of CO2 neutral shipments by Deutsche Post DHL almost quintupled from 2008 to 2009 – from 145 million to 704 million.

The study on sustainable logistics was developed with support from a number of experts from such institutions as MIT, Potsdam Institute for Climate Impact Research, National University of Singapore and the Technische Universität Berlinalong with executives from Deutsche Post DHL. Some of the group´s customers, including Fujitsu, Henkel, HP, Unilever, and Walmart, also contributed to the report.

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