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E-logistics and the Environment: B2C Comparative Environmental Impact of
Online and Conventional Retailing
Dr. Julia Edwards,Logistics Research Centre,
Heriot-Watt University
Evening Standard 20 June 2007
Environmental Claims by Online Retailers
The Times 26 December 2007
Standard methodologies?
Defra(CO2 environmental key performance indicators)
Carbon Trust & BSI(Methodology on Carbon Footprint Reporting)
NOT INCLUDED:• Emissions in use• Indirect impact on supply chain eg. Commuting to factory• When product is recycled or sent to landfill• Recently proposed toincluded retail emissions
Key Considerations
Product selection
ConventionalHigh street retailing ‘Last mile’ local delivery
Online
Warehousing Freight transport Personal Buying Choices
Issues common to both Conventional and Online
Drawing boundaries
Top-down approach (input – output methodology)
Bottom-up approach(process analysis)
Direct emissions – directly generated from company’s activities
Indirect emissions – part of company’s activities, but provided by 3rd party
• Customised by the type of organisation• Rely as heavily as possible on currently available data• Aim to standardise methodology
Scope of the Research
5 Products Groups
• Books
• Small electrical appliances
• Large electrical appliances
• Groceries
• Clothing
5 Distribution Options
conventional online
Purchase in shop
Transport to home
Purchase in shop
Home delivery
Purchase online
Home delivery
Purchase online
Collection from shop
Purchase online
Collect from other location
Links in the supply chain
point of divergence
shop home
Online v Conventional Retailing: Point of Divergence
shelf
shopback-store
home
GroceryClothing
national distribution centre
multi-channel retailer
factory / port
shop home
pure online retailer
shop home
Online & Conventional Book Supply Chains
Distributors
Con
sum
er
Pub
lishe
rs
RetailersCustomer collection
Local Depot
Local Delivery Depot
Retailer’s RDC
Parcel Hub / Sortation
Centre
Trun
king op
erati
on
Trunking
Local Delivery Depot
Parcel Hub / Sortation
CentreLocal DepotOnline Fulfilment
Centre
Van / c
ourie
r
Trunking Trunking
Wholesalers
Direct to customer
via postal servicesTrun
king
oper
atio
n
Primary trunking
• Type of transport operation• Trip distance• Fleet size and truck types• Vehicle utilisation• Dedicated load issues
TRANSPORT (from the suppliers)
Own vehicles
Contractor vehicles
Short-term hire
Defra (2005) (Updated June 2007)Guidelines for Company Reporting on Greenhouse Gas Emissions
Type of vehicle
% weight laden
Total km travelled
Litres fuel per km
Fuel conversion
factorTotal
kg CO2
Rig
idA
rtic
ulat
ed
0%25%50%75%
100%
0%25%50%75%
100%
0.2360.2620.2880.3140.340
0.3110.3450.3790.4140.448
2.632.632.632.632.63
2.632.632.632.632.63
x /1000
Total t CO2
x
Annex 6 – Fuel Conversion Factors
Energy consumption – what to measure
Warehousing / Order Picking
Lighting
Heating
Cooling / ventilation
Computing
Lift & transport
trucks
Conveyors
Order-picking trucks
Trailerloading systems
LPG vehicles
GasElectricity (including
green sources)
Manual operation
Handling equipment
Retail Operations
Retail Store Operations• Goods reception• Display / storage• In-store handling• Ancillary activities• On-shelf storage
• Display area• Backstore storage / returns• Customer / employees’ contributions• Multi-channel grocers – store-picking for online business
Typical Energy consumption -Benchmarks for Non-Domestic Buildings
Delivered energy consumption benchmarks (kWh/m2/yr)
Distribution warehousesDepotsSupermarketBook stores (all electric)Clothes shopsElectrical goods retailing
Fossil Fuel Electricity
169311261
-108
-
6739
1026255287230
Source: Carbon Trust (compiled by BRE, 2005)
Products & Delivery Methods
Source: Iain Beveridge Associates
Books
Product type
c 15-20 orders
2 items
2-3 items
1 item or set
c 2 itemsSmall electricals
Large electricals
Clothing
Groceries
Typical order size Main delivery vehicle type
• Parcel delivery van• Postman (walk / bike)
• Parcel delivery van• Postman (walk / bike)
• Parcel delivery van• Postman (walk / bike)• Home delivery courier (private car)
• Two-man delivery
• Temperature-controlled vans
Freight transport to the home – The ‘Last Mile’
• Narrow time-windows• Type of vehicle used (electric / courier)• Failed (& therefore repeat) deliveries• Product returns / collections
BooksSmall ElectricalsClothing
Online High street
3%5-10%
20-40%
up to 20%4-5%2-4%
Personal travel choices & the impact of Home Delivery
Substitute with other car-based
travel
Shopping trips
eliminated
Continue to shop for some
products
Remove shopping from multi-purpose
trips
Effects on car traffic
Usually walk / use public
transport to shops
Shop for other additional /
related products
Browse before buying online
NeutralPositive Negative
Leaving thoughts…. for the plane, train or traffic jam!!
• Shared operations for multi-channel;• Employees’ indirect contributions;• Allocating carbon between mixed loads;• Consumer behaviour & travel;• The ever-changing retail environment -
any audit only offers a snap-shot!!
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