Looking Deeper for More Sustainable eComm Solutions

I was taken about by a recent WSJ newsletter about how trucks have taken over the roads. See it here.  Trucks Taking Over Roads

A different perspective on eCommerce, yes?  As logisticians we tend to worry about the sheer difficulties of omnichannel like its complexity, cost, where to put inventory, the need for speed, how much will people pay for speed ?, how to profit ?…but thanks WSJ for putting a simpler, more tangible image to it.  All these trucks are a huge nuisance and they’re running over us.  

Given the many company commitments to electrification we’ve seen lately, the good news for emissions is that in a few years most of these trucks will be electric.  But are we just playing whack-a-mole here?  Where will all this truck power come from?   

How many thousands of square miles of wind farms and solar panels will it take to run these trucks? Ugh.

Please don’t misunderstand me, I love the shift to electrification.  Here’s my point:  the only truly sustainable solutions are those that reduce or eliminate requirements…the highway miles, the packaging, the waste.  That’s what gets my attention.  Yes, we need electrification.  But we really need less miles and waste. 

Fortunately, during the past year I’ve been lucky to get a glimpse at some promising new solutions, which I’d encourage you to check out:

Urban micro-hubs.  Have you seen this?  Micro-hubs transfer parcel deliveries from a delivery truck to a small E-Bike, reducing vehicle miles, emissions, congestion, and often reducing costs.  They take trucks off the streets and out of neighborhoods.  Pilots are emerging around the world.  Last year I had the privilege of leading a Master’s Supply Chain Management innovation class that developed a sustainable, cost-efficient micro-hub concept design for an Atlanta neighborhood.  Tremendously encouraging.  Separately, I saw where The University of Washington’s Urban Freight Lab recently completed a working pilot, for both small parcels and also large business deliveries, with promising results.  Check this link for the final report.  

Leadership in this area requires forward thinking municipalities.  This year I’m working with the Asheville Multi-Modal Commission to consider applications for our town.  Wish us luck! 

Re-selling returns.  The returns problem is another big physical part eCommerce.  CNBC reports online returns increased over 60% last year. See it here. A More Than $761 Billion Dilemma   

Well, here’s an interesting solution:    Optoro, an eCommerce returns solutions provider, directly re-sells online returns through their Re-Commerce solution.  Rather sitting in inventory for months, and often thrown into landfills, their solution quickly re-sells returned merchandise to a new buyer, turning potential waste into useful consumption, presumably dampening new manufacturing demand.  Here’s a 5 minute video produced by CBS Morning; extremely innovative that’s worth a look. See it here. Retailers Turn to Tech for Returns.

Re-usable packaging.  I love the idea of re-usable packaging for eCommerce.  Mountains of cardboard waste are another physical eComm image, and recycling is not enough (my opinion).  Re-usable applications are emerging, but they haven’t scaled.  In another Master’s innovation class I led last year, students developed a cost-efficient re-usable container concept.  A key learning from this work: an economical solution requires 1) an efficient, closed-loop ecosystem, and 2) an easy, almost foolproof customer return method.  Their recommendation – utilize the postal service.  How about that?  One of the largest closed loop systems in American logistics, stopping at our doorstep every day which if done right could easily support returns.  Imagine the potential ease of a postal carrier picking up and returning generic containers while dropping off your mail – without adding a single extra route mile!   Even better - consider the potential revenue boost of adding billions of packages to the postal revenue stream with little additional cost.  Yes – potentially billions of returns.  Pitney Bowes reports that the US shipped 20.2B parcels in 2020, and projects it doubling in five years. See it here.  Global Parcel Volume Exceeds 131 Billion in 2020

Obviously there are many issues to solve in working this out, but the students framed the project nicely.  I’ve introduced it to our local USPS solution engineers, although without success.  It really needs to get up to Postmaster General DeJoy or Secretary Buttigieg, and they are beyond my reach unfortunately.  So, we need to find another closed loop system.  Re-Commerce (mentioned above) is another closed loop system that could apply, and potentially with more receptive owners.

Planned buying subscription services.  How do we de-carbonize shopping?  I posted on this last year – consider a retailer enabling consumers to bundle purchases for delivery onto an optimized route.  Bundle things together, put on a delivery route, and eliminate a consumer’s shopping trip.  If this were developed, then omni-channel could truly de-carbonize shopping.  

Well, the closest thing I’ve seen to it yet came recently with WalMart’s announcement to expand their InHome service.  Click the link to see it.

I’ve never seen this work, but evidently the consumer creates a shopping list and WM gathers it all together and delivers it - all the way into the refrigerator.  The sustainability secret here is the bundled purchase, and the delivery eliminates a trip to the store.  Granted, the sales pitch is about convenience, not sustainability.  And the article doesn’t describe how they might support buying bigger bundles.  But the possibilities from this are inspiring.  No doubt this is coming.  Amazon…notice their commitment to sustainability, and their new emphasis on building stores…maybe they’ve realized that locating inventory close to customers is part of the sustainability secret.  Given their excellent consumer facing and logistics capabilities, no doubt they’ll be competing for this type of service soon. This would be ideal for local or regional grocers as well, to reach the buy-local people.  Regardless of who leads this, it could eliminate millions of miles. 

To conclude, eCommerce is much more than a new business model.  It’s a new, affordable convenience that’s re-shaping our lives and becoming second nature.  And as WSJ says, it’s physically impacting our lives.  It’s also impacting the planet.  Vehicle electrification is good, but it’s not enough.  Let’s emphasize solutions that maintain and improve the new convenience but also reduce miles and waste.